China’s stock exchange suffered the 2015 crash after a major equity bubble burst. The Shanghai Composite Index had more than doubled in the year before its June 2015 peak, encouraged by rising participation and extensive margin borrowing.
The market turned sharply in June 2015. The Shanghai Composite fell by about one-third in roughly a month, and volatility spread to the Shenzhen market and to global financial markets. Chinese authorities responded with measures including trading suspensions, restrictions on selling by major shareholders, and efforts to support share prices.
The turbulence was connected to China’s domestic equity boom rather than being a direct repeat of the 2008 U.S. crisis. Concerns about leverage, slowing economic growth, and the sustainability of high valuations made the market vulnerable when prices began to fall.
The episode also showed how policy intervention can affect a market where many companies, investors, and state-linked institutions have close connections to government decisions.