China Markets Fall Sharply Despite Fresh Help From Beijing

Now this is interesting.

At WSJ, "Fears about faltering Chinese demand rattles commodities markets":

Chinese markets fell sharply Wednesday, even as officials scrambled to arrest a three-week stock selloff. The widespread selling has spilled into global markets and is deepening doubts about Beijing’s limits to halt it.

China introduced fresh measures to restore investor confidence Wednesday seemingly to little avail. Stocks and Chinese bonds traded offshore, even high-quality corporate bonds issued by top state-owned companies, are getting dumped. China’s offshore yuan, which trades freely, hit a four-month low against the U.S. dollar amid a dimming outlook for the world’s second-largest economy.

The Shanghai Composite fell 5.9% at 3507.19, after losses of as much as 8.2% earlier Wednesday. The index has lost 32.1% since its peak in mid-June. The smaller Shenzhen Composite fell 2.5% at 1884.45, down 40% from its high last month.

The ChiNext board, which measures startups, ended up 0.5% at 2364.05 after regulators committed to buying small-cap stocks. The index remains down 40.6% since its June peak.

In Hong Kong, which has until recently fared better than the Chinese mainland, the benchmark Hang Seng Index closed down 5.8%, wiping out all of its gains for the year. A gauge of Chinese companies with Hong Kong listings, known as H-shares, plunged 6.1%.

A spokesman for the China Securities Regulatory Commission, Deng Ge said in a statement that “irrational selloffs” had increased, and described the current market mood as “panic sentiment.”

Hundreds of Chinese stocks were frozen from trading Wednesday, with 1,287 companies halted. That represents 45.6% of the constituent stocks of the Shanghai Composite and Shenzhen Composite and $2.5 trillion of market capitalization, according to data from FactSet.

China has put an arsenal of measures to work in recent days to stem the selloff that has wiped out roughly $2.4 trillion in value from China’s equities. On Wednesday, the China Securities Regulatory Commission announced that the China Securities Finance Corp., a commission unit that provides financing for margin trading, will increase purchases of small-cap stocks. The move follows an earlier pledge by the company to buy blue-chip shares to stabilize the market. China’s central bank said it would help ensure the unit has ample liquidity to stabilize the market.

Also on Wednesday, regulators said they would ease rules for insurers to buy blue chips and said state-owned firms shouldn’t sell their holdings in publicly listed arms.

Beijing’s attempts are undoing liberalization efforts that the country had pursued during the past year, said Gan Ai Mee, an investment manager at Aberdeen Asset Management, which has $490.8 billion in assets under management, and less exposure to Chinese stocks relative to other markets in its portfolio .

“It doesn’t bode so well for investor confidence,” she said. “It’s a step backwards in terms of financial reforms they’re trying to put through.”

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Between Greece, Europe, and China, U.S. treasuries are pretty much the only safe bet on international currency markets right not.

I've been saying this for years, but all the talk of American decline --- you know, about how this was supposed to be the Chinese century --- is a bunch of bull. Frankly, the world economy is crashing all around us and we'll likely see a global recession before too long, heh.