Who let out the bull in the China stock?
As roller-coaster market captivates the nation, economists are asking: what's causing the chaos?
Once it was square dancing that captured the imagination of retirees and stressed city workers winding down in the evening. But many now dance to the beat of a different drum, getting their kicks from discussing the roller-coaster stock market. Like in the square, keeping with the times is vital. Unlike in the square, as many have recently discovered, facing the music can be a painful business.
The stock market ended a seven-year downturn in the middle of last year, went on a bull run until June, then entered freefall over the past few weeks. Things started to stabilise this week following Beijing's unprecedented support measures, but the fluctuations have made many cut back on their entertainment and focus on money-making.
"Few can resist the temptation of making money, especially when everyone around you is talking about it," said retiree Wang Fengzhi, 56, who leads a square dancing squad of 30 people in Beijing's Chaoyang district.
"Since the market is so volatile, many members haven't been in the mood to dance recently. Our 7pm gathering has turned into a stock market salon in which we share investment tips," Wang said. "Many of us came out of the slump still with some gains accumulated from last year. We believe technology shares have the potential to rise further and the government will continue to support the market," she said with a confident smile. "Big fluctuations will bring good investment opportunities."
Some finance historians liken China's roller-coaster stock market to the US during its dotcom bubble in 2000. But there is more behind the China story than overvalued technology stocks.
The interventions of an ambitious central government and inexperienced investors betting heavily on borrowed money are thought to be behind the 150 per cent rise over the past year, from June 2014, and the 30 per cent slump of the past four weeks.
After plunging from the historic high of 6,124 points in October 2007, the benchmark Shanghai Composite Index remained in the doldrums, at around 2,000 points, for almost seven years until the rally began in the middle of last year.