The Risky Roller Coaster Ride That Is China’s Stock Market · Global Voices
Owen Guo

Green, the color of despair. A screen shows the collapsing Chinese stock market on July 7, 2015. Photo by Owen.
For Christine Kong, 2007 was a tough year. A slump in China’s stock market knocked down her family's wealth so much that, in her own words, “even my dog had lost weight”. Her hope of making quick money via the equity market was dashed with a lesson learnt — investing in stocks is risky and she would never do it again.
Or so she thought.
As China's stock market climbed earlier this year, Kong, a 31-year-old public relations manager in Beijing, was back in the game, partly because “her fingers were itchy” (Chinese slang for not being able to resist temptations) and partly because of peer pressure. Kong told Global Voices:
My friends and colleagues all invest in the stock market. If I invested in stocks, we would have common things to talk about. I think it’s human nature that if you earn more, you would want to invest more.
She bought in when China’s benchmark stock index Shanghai Composite hit 4,000 in April, a moment state-controlled People’s Daily called “just the beginning of the bull market”.
“I was doing quite well this time,” she recalled.
But that was short-lived. A precipitous stock price drop that started in recent weeks has halved her stock value, as the market euphoria in China quickly morphed into the worst equity woe in two decades. Since reaching a seven-year high in mid-June, the stock market has suffered a substantial loss, wiping out an estimated $3.2 trillion in market capitalisation, or 10 times the amount of Greece’s gross domestic product. Kong said:
It’s hard to describe my mentality. When stock prices began to drop, I didn’t take it too seriously. When it began to drop really badly, I felt a lot of pressure. […] But when that trend continued, and when your stock dropped to a point when it got suspended, you no longer feel panic. I feel quite calm now but sometimes that feeling is accompanied by some slight depression.
The market rout has stuck a nerve with both investors and communist party leaders. As stock investors watched their fortunes evaporate last week, Beijing stepped in with heavy-handed measures, including banning major shareholders from selling and injecting liquidity into the markets, among other things. Hundreds of companies resumed their trading on Monday after share suspension last week to avoid volatility.
Following a series of state interventions, the stock market has rebounded since last Thursday. But bruised investors will just have to hold their breath a bit longer before they can recover their loss.
Pessimism and anger
The unease was palpable. On Tuesday of last week, a dozen old men gathered at the entrance of a brokerage firm near Beijing’s second ring road. Between sipping on tea, chain-smoking and occasionally flipping through newspapers, the men talked about the Chinese stock market as if they were left out of a carnival. One man, who refused to identify himself, said:
I am worried the index is going to drop further. All my eight stocks have either been suspended or plummeted, I really want to beat someone up to vent my anger.
The media is full of it, he complained, referring to previous Chinese media reporting that cheered on a booming market. A man sitting beside him chimed in, pointing to a front-page story of Global Times newspaper with the headline “China's move to stabilize the market gives the world confidence”.
“This was just intended for the outsiders to see,” he sighed.
The brokerage firm can be easily mistaken for a nursing home. Less tech-savvy seniors come here for the big screen in the hall that displays the latest stock trends. Some form groups to play poker while others doze on the bench. Almost all the stocks were in the negative that day.
At one point, a neatly dressed middle-aged woman wandered around the room shouting: “This is all controlled by US churches! Americans! They will shoot you with guns! I’ve earned 3,000 yuan in the past six years….”
The behaviour attracted no onlookers. “We’ve seen at least some 30 people in this hall go crazy in the past half month,” a woman explained.
A 2013 survey found that 61.3% per cent of Chinese stock investors were plagued by “persistent negative emotions”. In a further sign of psychological stress, an unconfirmed snapshot of a notice, apparently attached to a wall of a building, was widely circulated last week on Twitter. It said, “Due to the stock market's collapse the rooftop is now closed to prevent accidents”:
“Due to stock market's collapse the rooftop is now closed to prevent accidents” (in simplified Chinese. Online pix) pic.twitter.com/cRm6lDnzwo
— Venus Wu (@wu_venus) July 8, 2015
Chinese social media platform Sina Weibo has banned the word combination “stock suicide”.
China now has 90 million stock investors, about twice the population of Spain. As property prices have stagnated and saving becomes less attractive following interest rate cuts, buying stocks is now a popular choice for the middle class. In April and May alone this year, 14 million new stock accounts were created.
To Chinese authorities, a bull run is a double boon at a time of a slowing economy. For one, making people richer will boost consumption, as Beijing tries to shift away from smoke-stack industries towards services. It also helps debt-laden state companies ease their financial strains.
Contrary to other western markets, the bulk of Chinese stock investors are so called “ mom-and-pop” individuals who have little investment experience. For many, it’s a high-stakes game they can’t afford to lose. And while there are conflicting views on exactly how much of an impact the turmoil will have on China’s consumption, investors like Christine Kong will for now stop throwing her money around:
I was hoping to use the money I earn from the stock market to fly to the US to see my friends. Now I won’t be going. They will come to see me. I’ve also decided not to buy any handbags and not to go on overseas trips in the next two years.
But for many, it's an addiction that's hard to quit, as Weibo user Li Dapeng wrote:
最黑暗的时候黎明即将到来，中国不是希腊，相信中国人的智慧！问题总会解决！八周的最小反弹时间会按时到来！没那么悲观！时间会消除一切忧虑，生活不会停止！擦干眼泪继续战斗！
The darkest moment means that the dawn will be just around the corner. China is not Greece, and we need to believe in the wisdom of the Chinese people! Problems will be solved! ….. Wipe your tears and continue the fight!