China takes emergency measures with stock market in epic plummet

China takes emergency measures with stock market in epic plummet
(Image: EPA via WSJ)

[Ed. – This one’s big.  Emphasis added.]

China decided to suspend new stock sales and, in a first, establish a fund to stabilize the country’s share markets, making clear the increasing concern among China’s leadership that the stock panic could spread to other parts of the world’s second-largest economy.

Senior officials from the State Council, China’s cabinet, the central bank, its top securities regulatory agency and other financial agencies held a meeting Saturday to discuss another round of measures to help arrest the stock slide, according to people with knowledge of the matter.

The discussions occurred as the benchmark Shanghai Composite Index has lost more than a quarter of its value since a high set June 12. …

According to a statement from the Securities Association of China on Saturday afternoon, some 21 Chinese brokerages led by Citic Securities Co. will invest the equivalent of 15% of their net assets as of the end of June, or no less than 120 billion yuan in total, in the [market-stabilization] fund. But that amount is unlikely to be enough. The plunge in Chinese equities in the past three weeks has wiped out about $2.4 trillion in market value, or about 10 times Greece’s gross domestic product last year.

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