Market Crash Day in ChinaTen days ago, China welcomed the auspicious Year of the Pig. Whether this is the super-auspicious Year of the Golden Pig or merely the Year of the Fire Pig is apparently up for debate, but it’s OK in either case. Five days ago, on the Fifth Night of the new year, the city rocked with explosions from roughly 9 pm to 2 am, as families stayed home and set off endless strings of firecrackers to welcome the God of Wealth into their homes. Apparently the noisier it is, the more welcome the god feels. Two days ago, the Shanghai Composite index closed above 3000 for the first time ever, an emotional threshold comparable to when the Dow crossed 10,000. A mere 24 hours ago, the front page of the English-language and state-controlled Shanghai Daily proclaimed, in banner type, “Stocks Smash Record as New Year Dawns.” That same Shanghai Daily has in the same prominent space this morning: “Wheat Scientist Wins Top Research Honor.” Down in tiny print at the bottom of the page is a photo caption pointing to an inside story about the previous day’s market collapse. Both the Chinese and the English sites for the People’s Daily newspaper give the same minimalist treatment to the market news. (The nationwide English-language China Daily, also state controlled, to its credit runs the market story at the top of its front page, although its web site is understated like the rest. The Shanghai Daily’s web site gives the news the prominence the physical paper so notably avoids.) That the Shanghai market should have wild ups and downs is no surprise. The Powerball total bounces around a lot too. The surprising thing—and worrisome, I assume—is that the lottery-like behavior should have influenced markets across the world. Or maybe the Shanghai market is more typical of world exchanges than I had thought? Later today we’ll go to one of the many neighborhood parlors where ordinary Shanghainese people can gather to watch real-time market reports. These little joints remind me of OTB parlors in New York City, in more ways than one. James Fallows is a national correspondent at The Atlantic.
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