China’s government failed to arrest the extended slump in the Chinese stock market. The Shanghai Composite index nosedived by 8.5% posing the largest drop since 2007. The recent events proved that any kind of external control is powerless against the market forces. The laws of the market are unshakable as well as the laws of physics. Even the Central Committee of the Communist Party of the People’s Republic of China cannot abolish them. Unbiased analysts forecast a significant slowdown in the Chinese economy with one voice, and the official data meets their concerns. The recent report unveiled a drop in income of manufacturing companies in China and most experts are sure that this is the first in the chain of similar reports. Ongoing developments not only struck a blow against the financial well-being of the country, but also compromised omnipotence of the political authorities, which failed to improve the situation.
However, the current slump was not a surprise to economists who had forecasted such an outcome; their warnings however were not heeded. Now we can only watch what is happening on the market trying to predict what will be the influence on the Chinese economic growth rate. With the fact that the slump has taken place in the current quarter, this data is unlikely to come out in the near term.
