Don’t Look Now But . . . China?

While everyone was getting on his Great American Barbecue yesterday for the July 4th holiday and awaiting the Greek referendum today, the Chinese stock market was crashing again. It’s down 12 percent over the last week, almost 30 percent in the last month.

Tyler Cowen is on it, with a simple message: Greece is small; China is large. Uh oh.

From behind the FT’s paywall:

The Shanghai index is firmly in bear market territory, down 28.6 per cent since the June peak, while the tech-heavy Shenzhen Composite has fallen 33.2 per cent.

There were also signs on Friday that the stock market turmoil is beginning to reverberate beyond China. The Australian dollar, often traded as a proxy for China growth, is down 1.2 per cent to a six-year low of US$0.7539.

The 21st Century Business Herald, a Chinese daily newspaper, on Friday quoted multiple futures traders as saying they had received phone calls from the China Financial Futures Exchange instructing them not to short the market.

China’s financial titans are attempting to set up a “market stabilization fund.” This doesn’t sound good.

Meanwhile, Tyler Cowen won the Internet yesterday with this line about Greece: “Look at this way: if you lost a public relations battle to Germany, you are probably doing something very badly wrong.”

UPDATE: More from The Atlantic.