The government has taken steps to cool a potential bubble in the stock market. From AP:
Chinese stocks plunged Wednesday after the government raised a tax on share trades, trying to cool a market boom amid growing concerns about a possible bubble.
The main Shanghai Composite Index tumbled 6.5 percent at 4,071.27 after hitting a record high on Tuesday. The Shenzhen Composite Index for China’s smaller second market fell even more, closing down 7.2 percent at 1,199.45. [Full text]
See also “Global view on China: Minor ripple effects this time” from MarketWatch, “Are Chinese Stocks Contagious?” from Council on Foreign Relations’s website and “Shanghai selloff hits Wall Street” from CNN.
