If you've been living under the rock for the past few weeks, this article summarises what happened to the Chinese stock market. What? From July 2014 to June 2015, the Shanghai Composite Index rocketed from 2050 to 5020 (close to 150% increase) Why? Not because of the underlying Chinese economy, definitely not. The economy registered the lowest growth (link). Instead, the Chinese government relaxed the margin trading regulation (buying stocks using borrowed money). This resulted in hordes of your inexperience investors with and without financial knowledge buying stocks. That meant that people are merely buy stocks because someone told them to do so. They've no idea what they're doing. That screams BUBBLE. Scramble to "save" the market and curb social unrest Then, in Mid June 2015, the Chinese stock market started to crash on margin trading calls and the government decided to intervene. 1. Interest rate cut 2. Government bought ......