China’s stock-market crash began in June 2015 after the Shanghai Composite had more than doubled in roughly one year.
The Shanghai Composite rose from around 2,000 points in mid-2014 to more than 5,000 in June 2015. The rally was fueled partly by enthusiastic retail participation and extensive margin financing. Prices then fell sharply, producing repeated emergency measures by Chinese authorities.
The government responded with trading suspensions, restrictions on some sales, support from state-linked institutions, and investigations of market activity. The turbulence continued into 2016, when another sharp decline contributed to renewed global concern.
This episode is often described as a Chinese stock-market bubble and crash, but it was not the same event as the 1997 Asian financial crisis. China’s market turmoil also occurred within a larger period of concern about slowing economic growth and financial leverage.