Let me further add here that a crash in stock prices in China is BULLISH, not bearish for China. Speculation bubbles do their primary damage not by the losses they ultimately create but rather by the misallocation of resources. Labor is one of the most important variables to any economy. And in order to generate really sustainable growth you need an educated labor force and an increase in technology. Speculation usually takes away from both as very otherwise intelligent and able workers substitute speculation for a real job that utilizes their expertise. A perfect example of this was the 2008 credit crisis. As the real estate and stock bubbles peaked, so many otherwise intelligent Americans were allocating their time and wares towards "buying real estate" with no money down or flipping stocks and homes. These were people were advanced degrees and knowledge that were "wasting" their productivity. What happened after the crash? They left those markets and re-entered the labor market, many to silicon valley and more into tech startups. The result? One of the biggest advances in a decade in technology. Once labor got re-directed where it could achieve the highest marginal return, overall society benefitted the most. This will happen in China as well. As the bubble deflates, educated Chinese will direct their skills back into labor and China will see a real boom, not one predicated simply on cheap credit, but one on real economic growth driven by the advancement in technology. It's this "stock and real estate" bubble that is actually holding China back. The most bullish thing that could play out here is a nice sharp correction. I would be very a long term buyer of both China and India. These countries are in the top of the 2nd inning. The US is batting in the bottom of the 8th. There is a long way to go there. I think there are investments there in both countries that have 500 to 1 payoffs for those willing to work to find them. Just my opinion.
http://www.bloomberg.com/news/artic...on-short-sellers-who-bought-as-stocks-tumbled So much choice stuff in this article, but here's one from the Department of Unintentional Short Sellers: "After markets closed, China’s financial futures exchange made it more expensive to speculate on stock-index contracts and said it will inspect traders to prevent “deliberate shorting.” Chinese brokers set up a fund to support share prices, while companies suspended plans for initial public offerings to help reduce the supply of new equity."