In recent weeks, the Chinese stock market has taken a massive plunge and in July shares suffered their worse month in six years, falling by 29% from the peak in June. This followed a humungous boom in stock prices since the beginning of 2015. Indeed, since August of last year, the market index in Shanghai has risen 160%. And even after the collapse in the last month the index is still nearly 80% higher than this time in 2014.This article from the latest edition of the Weekly Worker is one of the best pieces about the achievements and dangers threatening the Chinese economy - and by extension its effect on the rest of the world - I have read in a long time. It's a long read, but it much better than anything you'd catch in The Economist, FT, etc. Seriously.
This stock market bubble is of the proportion of the US in the 1920s that led to the crash of 1929 and the subsequent great depression. Is this what is in store for the Chinese economy as well?
Thursday, 6 August 2015
It's not very often I mention my (very much) erstwhile comrades of Weekly Worker fame, but they are going through something of a purple patch at the moment. Firstly, their call for Marxists to join the Labour Party attracted mainstream attention and proved a useful foil for some on Labour's right who've forgotten to counter politics with politics. And then there is this: