July 10, 2015 (Stratfor, repub. by Vietnamica) — Beijing will continue to intervene where possible to prop up markets and market sentiment. A collapse of the stock market would likely increase deposits in ordinary bank accounts. This would compel Beijing to rely more heavily on banks to fuel growth and pressure China to accelerate financial liberalization efforts as a way to cultivate household consumption. The Shanghai Composite Index fell 6 percent on July 3, rounding out a 28 percent decline since June 12, when the country’s stock markets peaked. The deterioration occurred despite intensive government efforts to stabilize prices and revive (more…)
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