The Chinese Stock Market Rout

Any market can experience a bear market and the Shanghai Composite, the 144 China-based companies that have a primary listing on major U.S. stock markets, is no exception. The Shanghai Composite lost about 8.5 percent on Monday and is down about 27 percent since its June 12 peak. The result is a loss of about $40 billion in stock value! Another measure of Chinese stock performance, the CSI300, which comprises the largest listed companies in Shanghai and Shenzhen, fell 8.8 percent Monday. As a result, the Chines government has said that it was ready to buy shares of stock to stabilize the market and stop the "systematic risk." Regulators also said that they would harshly punish anyone who was malicously shorting stocks.