A sky-high rally, a scary fall and unprecedented government action to stop that fall. Is the government for the first time losing its dominance to market forces, as some suggested? Financial analyst Arthur Kroeber does not think so, he tells Globe and Mail.
The Globe and Mail:
For the Chinese leadership, however, the possibility of more balance in Shanghai and the hope that Shenzhen will also find a more stable footing may be good enough.
“I don’t think they need a big rally. As long as they can stop the losses, they’re probably going to be happy,” said Arthur Kroeber, the Beijing-based head of research for Gavekal Dragonomics.
“This is not a government that believes in unfettered markets,” Mr. Kroeber said. “They never have, they never will. They believe markets are tools to greater ends – and if things seem to be going out of kilter, they’ll adjust things.”
Still, if the coming days bring a further rout, China has shown its willingness to intervene dramatically to prop up share prices – suggesting it will use more firepower if needed.
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