Greece’s financial woes have been all over the news due to its failing economy. But if you’re concerned about what’s going on in Greece, turn your head and pay attention to what’s actually happening to the Chinese stock markets, which could lead the country to an economic downfall.
Both the Shanghai Composite and Shenzhen Composite have seen roughly a 30 percent decrease since their highest points in mid-June. They could continue to fall. There is currently concern among Chinese officials that their stocks are in a bubble.
The past several months have been a rollercoaster ride for Chinese investors with the market opening or ending the day with wild swings, some as much as five percent. According to the Bespoke Investment Group, the stock markets in China have lost $3.25 trillion.
Officials have tried to take major steps, including rate cuts at the Chinese central bank, to prevent further damage that could lead to an economic depression. In addition to the government’s attempts to keep the markets afloat, nearly a quarter of Chinese companies have stopped trading.