China’s stock market crash in 2015 followed a rapid equity bubble and a government devaluation of its currency.
Chinese mainland share prices rose sharply from mid-2014 into June 2015, with large participation by individual investors and extensive margin borrowing. The Shanghai Composite reached a closing high of 5,178.19 on June 12, 2015, before falling steeply.
The turbulence intensified in the summer. On August 11, 2015, the People’s Bank of China changed the way the renminbi’s daily reference rate was set, producing a notable devaluation. The currency move added to concerns about China’s economic outlook and helped trigger wider global selling.
The 2015 episode is sometimes reduced to a currency crisis, but it involved both equities and foreign exchange. Chinese authorities responded with measures including trading restrictions, state-linked purchases and investigations into market activity.