Almost 200 stocks halted trading after the close on Monday, bringing the total number of suspensions to 745, or 26 percent of listed firms on mainland exchanges, according to data compiled by Bloomberg. Most of the halts are by companies listed in Shenzhen, which is dominated by smaller businesses.
The suspensions have locked up $1.4 trillion of shares, or 21 percent of China’s market capitalization, and are becoming increasingly popular as equity prices tumble. If not for the halts, a 28 percent plunge in the Shanghai Composite Index from its June 12 peak would probably be even deeper….
The rout in Chinese shares has erased at least $3.2 trillion in value, or twice the size of India’s entire stock market.
...
This doesn’t necessarily mean that financial contagion will infect China’s real economy. Chinese equity markets are pretty thin and small as a percentage of GDP compared to the developed world. Less than 20 percent of household assets were in the stock market. Financially, it would be difficult to argue that this is China’s Lehman moment.
...
The hard-working staff here at Spoiler Alerts will leave it to the Chinese economic experts to hash out that debate. The one thing that these analysts and everyone else agrees upon is that this will put a serious dent into Xi Jinping’s efforts to liberalize the Chinese economy on issues ranging from capital account liberalization to simply letting the market play a ‘decisive’ rolein the economy.
