ABSTRACT. In this paper, we examine the events that generated great stock market volatility in China, in the summer of 2015, and the government actions that sought to stabilize the market. The failure of government intervention underscores the fact that China’s stock market is underdeveloped, and the government is too actively involved in the financial sector. We conclude with policy recommendations, including providing strong investment alternatives, enhancing the stock market to better reflect the real economy, and reducing the role of government in financial markets. pp. 7–15
JEL codes: D53; E44; G15; O16

Keywords: China; stock market; margin finance; short selling; bubble; bailout

How to cite: Hsu, Sara (2016), “China’s Volatile Stock Market in the Summer of 2015 and Policy (In)Effectiveness,” Journal of Self-Governance and Management Economics 4(4): 7–15.

Received 8 December 2015 • Received in revised form 7 January 2016
Accepted 8 January 2016 • Available online 25 January 2016


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State University of New York, New Paltz

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