Author(s)

Fanhua Zeng¹, Wei-Chiao Huang², James Hueng²

¹Zhongnan University of Economics and Law, Wuhan, China.
²Western Michigan University, Kalamazoo, Michigan, USA.

The objectives of this paper are to provide a descriptive analysis of the Chinese stock market gyrations in 2015 and to assess the effectiveness of Chinese government’s attempts to rescue the stock market from collapse. This paper views the efforts taken up by China’s policy makers in 2015 to stabilize the stock market as a case study of public crisis management. We first briefly chronicle the boom and bust of China’s stock market in the recent past seven months, and analyze the underlying causes and background of these gyrations. Next, we describe various policy actions implemented by the government in response to this public crisis. Finally, we provide some assessments and projections of the effectiveness of these intervention measures. We conclude that while it is understandable and seems necessary for the Chinese authority to intervene to prevent the crisis from exploding further, it has unfortunately damaged the credibility of the current leadership’s management capability and resolve to “confine the power inside the cage”.

Chinese Stock Market, Market Stabilization Measures, Public Crisis Management

Zeng, F. , Huang, W. and Hueng, J. (2016) On Chinese Government’s Stock Market Rescue Efforts in 2015. Modern Economy, 7, 411-418. doi: 10.4236/me.2016.74045.