“Mankind is facing a crossroad – one road leads to despair and utter hopelessness and the other to total extinction – I sincerely hope you choose the right road”― Woody Allen,
At first sight the spectacular stock market bubble that has wreaked havoc on the Shanghai and Shenzhen exchanges in recent weeks appears uniquely Chinese. It was, after all, substantially fomented by the state, no doubt with a view to recapitalising rocky government-owned enterprises on the cheap thanks to
stratospheric share prices.
Yet the difficulty Beijing has had in propping up the market since the recent plunge demonstrates the limits of China’s authoritarian, interventionist model of capitalism. A bubble is a bubble regardless of location. Taming the capitalist beast turns out to be as tricky in China as it is in the west.