Communist China Battles Stock Market Plunge With Tyranny, Terror
by Alex Newman
TheNewAmerican.com
Monday, 14 September 2015
In the face of the dramatic collapse of its stock market in recent months, the communist dictatorship ruling mainland China responded as it does to most perceived problems: with outright tyranny and terror. From detaining and terrorizing stock traders to censoring and manipulating press coverage of the markets, Beijing is again revealing its true colors: red and redder. The consequences of the regime’s response will likely be felt for years to come, with one expert comparing China’s stock market today to a “roach motel.”
Whether the autocratic strategy will work to stem the market volatility — even in the short-term, to say nothing of over the long-term — remains to be seen. Chinese stocks are still cratering despite the heavy-handed response. In less than a month between mid-June and early July, Communist China’s two primary markets crashed by about 30 percent, losing over $2 trillion in value. In August, the sell-off was brutal as well. On September 14, shares continued their downward trajectory. Just in the last few months, Chinese stock markets have lost close to 40 percent of their value, and experts say there is plenty of room left to keep falling.
“We’re certainly not out of the woods,” Fraser Howie, co-author of Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise, was quoted as saying by the Los Angeles Times in July. “The index is no longer falling, but that’s only part of the story. The real story is the government response, and the integrity of the market.” Stocks continued to dive after that, but analysts appear divided on whether the regime’s measures helped stem the market bloodbath.
One thing is certain, though: The demonstrably false myth of Communist China becoming some sort of free-market utopia through “economic reforms” in recent decades has been shattered in the public consciousness. Unfortunately for the Chinese economy, more than a few analysts have now suggested that the regime’s totalitarian response to the plunge — censorship, intimidation, arbitrary rules imposed on investors and companies, detaining traders, and more — is likely to further spook economic actors around the world into staying out of Chinese markets, probably for a long time.
All of that, of course, means bad news for China as it struggles to prop up its economy and its strictly controlled currency using a bizarre combination of Federal Reserve-style market manipulation and outright coercion. Confusion is reportedly running rampant, too, with traders and firms unsure about what actions exactly the regime has criminalized or allowed when it comes to the stock market. The extent of Beijing’s intervention in China’s opaque markets also remains unclear, but it is massive, without question.
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