Any capital outflow must not be allowed to hurt stock market
China's stock market continued to tumble on Tuesday but, unlike other major indexes across the world, the fall was not triggered by the terrorist attack during an Ariana Grande concert at Manchester Arena in the United Kingdom on Monday. Instead, the weakening of the Chinese stock market in recent weeks is a reflection of the domestic market's inherent problems and the unstable global macroeconomic and financial situation.
The benchmark Shanghai Composite Index dropped by a moderate 0.45 percent to hit 3061.95 on Tuesday, but most stocks slumped, with only a small number of big-cap stocks managing to rise. Since early April, the SCI has dropped 7 percent, with individual stocks slumping by much larger margins.
It is reasonable to attribute the fall of stocks to the economic slowdown and the tight regulation that China has imposed on the market to curb broad financial risks.
