Chinese investors again experienced a roller coaster ride on Tuesday. After the Shanghai Composite tanked by more than 8% yesterday, earning it the nickname ‘Black Monday’, the index dropped sharply again for a second straight day, falling by over 7%. That puts the index a whopping 42% from its peak in June.
Faced with this new rout, local investors — many of who are still reeling from the meltdown that began in June — posted reactions across Chinese social media ranging from dark humor and despair to a revealing mistrust of the government.
“The stocks I bought have dropped so cruelly,” one Weibo user posted. “In a previous session, I made 200,000 (yuan). Because I was greedy I wanted to make more, like a snake trying to eat an elephant. I watched my money, everything that I made and some of my original investment (disappear). My heart is bleeding! The only lucky thing is that I was able to pull out most of the original funds in time.”
Another said: “In two months the Chinese stock market has dropped 37% taking my savings of over a decade…This is a China specialty.”
Average Joe investors hurting
Some of the biggest victims of the crash have been ordinary Chinese people. A large-scale survey of households in China from late last year showed that two thirds of new investors in the Chinese stock market didn’t complete high school.
“The Chinese market is not mature. Ordinary people were jumping on the bandwagon with money they worked hard to earn. Just don’t shove in the line to go up to the rooftop (to jump),” a Weibo user wrote.
The comparisons even got slightly poetic: “The stock markets right now are like a bad boyfriend. Time after time you believe his promises to become good but then every time he disappoints by breaking another new record and hurts you.”
Time for the bubble to burst?
Many others bemoaned the interference from the government that’s keeping the stock market artificially propped up. At the root of the stock market crisis are investors who continue to pour money into Chinese stocks even though real economic growth and company profits are weak, which wouldn’t happen if share prices were able to reflect a company’s true value.
“What a great Chinese dream! The stock market bubble should just burst… Last month, my father went back to his hometown of Jiangyang (in Sichuan),” one cynic said on Weibo.
“Our relatives said in the last two years many businesses have closed and even a large factory wasn’t able to get enough orders to keep going. Compared to 2011 when he visited, it’s day and night. Who are you fooling?
Another chimed in: “If housing prices would fall like this that would be great, then the Chinese economy would completely collapse and the government would also collapse. (You) can only rebuild after it breaks.”