Chinese Investors Who Borrowed Are Hit Hard by Market Turn
But there is a major difference between the markets in China and those in the other big economies like the United States. In China, mom-and-pop investors, rather than big institutions, make up the bulk of stock purchases. Such smaller players don’t necessarily have the resources to withstand the volatility.
.. In a May report, Credit Suisse analysts said that margin lending and other forms of borrowing to purchase shares amounted to more than $500 billion, increasing the market risk.
.. Since May, China’s stock market — the second-largest in the world after the United States — has lost nearly $3 trillion in market value.
.. In late June, China’s Central Bank cut interest rates, a move meant to help make buying stocks more attractive than putting money in the bank.