Plenty to spook those of a nervous disposition today.
With their stock market continuing to mock the Communist Party’s hitherto unchallenged omnipotence, many patriotic Chinese suspect that the meltdown is the work of George Soros and other hostile foreign manipulators jealous of the country’s rise and determined to crush it out of spite, just like evil foreigners have always done. It is not hard to imagine valiant cyber-warriors of PLA Unit 61398 vengefully hacking critical overseas servers in defence of the nation.
Thus yesterday’s mysterious confluence of events. The New York Stock Exchange’s computers failed and brought trading to a halt. United Airlines’ systems collapsed and grounded aircraft and passengers around the world. The Wall Street Journal website crashed, depriving investors of essential financial information. And to cap it all, in Hong Kong, the Mid-Levels Escalator was down between Lyndhurst Terrace and Hollywood Road, leaving the cream of the city’s wealthy and handsome intelligentsia stranded.
Or maybe it’s all coincidence, not conspiracy. Should we fear a country whose leaders seriously imagine that they can tweak the stock market index like the air-conditioning temperature? Let’s think positive…
Beijing’s Wacko Anti-Unreasonable-Plunge Decisive Action du jour: banning directors, bosses and holders of more than 5% of a company’s stock from selling for six months. This is the latest in a long line of daily, ever-more imaginative attempts to prop the market up – cutting interest rates, suspending IPOs, diverting pension funds into the market, bullying brokerages into buying, freezing half the nation’s listings Just Like That, letting margin traders use children as collateral, and so on.
A Bloomberg report in the South China Morning Post describes the anguish being felt by China’s car dealers as buyers postpone purchases, and even risk forfeiting down payments. One auto manufacturer’s representative denounces the stock market as “a meat grinder, shredding money meant for buying cars.”
Note that interesting turn of phrase: money meant for buying cars. Do I detect a hint of extreme bitterness, by any chance? A faint impression of personal, seething resentment at injustice as perceived by those with a well-entrenched sense of entitlement? That money was earmarked for me and no-one else, and now it has evaporated, and I might have to make a living doing something socially useful.
Mmmm. Enjoying this. But wait – there’s more!
The SCMP also talks to a (presumably) French fund manager based in Shanghai whose team had to dip into their own pockets and put RMB500,000 each into their company’s rapidly-shriveling-in-value equities holdings, as a gesture of what I believe the Gallics term solidarité with their friendly local market regulators. “There was an internal debate,” he says, “but as we are in China we had no choice.” That’s right. They can run you over with tanks. Did they forget to mention that?
Back in Hong Kong, the general, if unspoken, feeling is that perhaps we take back all that stuff our bureaucrats were saying about integration with Mainland markets and keep things just the way they were, safely insulated from the craziness of a Communist leadership having a tantrum over the refusal of the laws of gravity to bend to one-party rule. Bargain hunting is pushing the local H Shares back up a bit. And thoughts turn to reasons for optimism. If ‘money meant for buying cars’ has vanished, maybe money meant for coming to Hong Kong and buying tacky designer-label goods, watches, gold trinkets and even Luxury Exclusive Premier-Living Elite Apartments has also disappeared for ever. Clouds, silver linings…