China’s stock market was at the center of the major crash that began in June 2015.
The turbulence followed a dramatic rise in mainland Chinese share prices, especially on the Shanghai and Shenzhen exchanges. Many individual investors had entered the market, and margin financing allowed people to buy shares with borrowed money. When prices began falling in June, forced selling and attempts to reduce leveraged positions intensified the decline.
The Shanghai Composite Index fell by roughly one-third from its June peak to its July low. Another severe wave of selling occurred in August, when a large devaluation of China’s currency and concerns about economic growth unsettled global markets. The episode is often described as Chinese stock-market turbulence rather than one single uninterrupted crash because it involved several waves.
Chinese authorities responded with measures including trading suspensions, restrictions on some selling, and support for selected shares. The crisis also demonstrated that mainland Chinese equity markets could transmit fear to international investors even though they remained partly separated from global finance.