Mr. Shangkong | Global index provider MSCI joins the list of those blamed for China market crash
Index provider blamed after margin finance, short selling and suspicious foreign banks
As Beijing fights its worst stock market crisis in years, the two most important questions facing leaders - including Premier Li Keqiang - must be where to find the money to boost the market and what was the real cause of the crash.
The first answer may be an easy one. The central bank is now the de facto top provider of unlimited liquidity support to local brokerages to stabilise the market. Hundreds of billions of yuan have been poured into the market. As a result, investors have seen some recovery after the 25 per cent fall in the benchmark Shanghai index over the past four weeks.
The answer to the second question may be even more important than the first as Li must want to prevent the next crisis. Since the current market woes began late last month, securities regulators - together with some state media that have used the crisis to promote nationalism - have blamed out-of-control margin finance, "malicious short sellers" and some "suspicious foreign banks".
Last week, a blog written by an unnamed trader at a government fund revealed one more "excuse", which apparently the government now does truly believe. Who was at fault? Global index provider MSCI.
On June 9, MSCI declined to include Chinese stocks in a key index for global stock markets this year.
It was a huge disappointment for Chinese investors, and clearly the government too. Beijing thought its chances had been good.