take a deep breath and chill everyone, page-6

Poyndexter

The point you make is relevant as the Chinese stockmarket doesn't actually supply the necessary liquidity to their economy (in the mananer of Western markets) as most of the Chinese "companies" are state owned.

Thus the withdrawal of loans for "gambling" on the stockmarket will not in any appreciable way reduce demand for resources to fuel their rapidly expanding economy.

There's still about 1 billion Chinese whose upward aspirations (represented in the planned construction of one city per year the size of Brisbane and Sydney combined) are not going to disappear overnight due to a state-induced Chinese stockmarket "crash".

But it certainly does affect Western sentiment hence the knee-jerk reaction of the Western markets, who figure that China's requirement for their goods will diminish.

Which makes it "double-happiness" for the Chinese govt. Correct their own market bubble and reap the benefit of lower global resource prices as Western stocks and resource prices tumble from a Chinese Govt induced panic that their economy is protected from.

Why? Because the Chinese Govt supplies the liquidity to their economy - not their stockmarket.

'arf, 'arf.

(Sir) Lunchalot
Scoffer Extraordinairre