The Shanghai Composite reached a closing low of 2,927.29 during China’s 2015 stock-market crash. The index’s sharp decline followed a spectacular rise that had begun in 2014 and accelerated into mid-2015.
Chinese retail investors participated heavily in the boom, often using borrowed money to buy shares. After the market peaked in June 2015, falling prices triggered margin calls and forced selling. Government agencies responded with measures including restrictions on certain share sales, support for purchases and investigations into market activity.
The Shanghai Composite’s 2015 fall was followed by renewed turbulence in early 2016. A separate concern involved China’s exchange-rate policy and fears about slowing economic growth. The market’s circuit-breaker system, introduced in January 2016, was suspended after it appeared to intensify selling on its first days of operation.
The index is a broad benchmark for shares listed in Shanghai, not a complete measure of every Chinese company or of the entire Chinese economy. Hong Kong’s Hang Seng Index and the Shenzhen Composite followed different paths.