As Chinese shares fall, the real fear is that the economy itself is grinding to a halt

Recent events in Shanghai’s stock markets have been all too reminiscent of the tales that have entered American folk memory from the days of the Wall Street crash in 1929: of stock-tipping shoeshine boys, exhausted traders, and ticker-tape machines spooling late into the night.

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In China, the Shanghai Composite Index lost more than 8% of its value last Monday, and shares have suffered their worst month for six years, falling by 29% since they peaked in June. America’s great crash, and the policy failures that compounded its effects, helped to trigger the great depression. Partly because of the lessons learned then and since, few analysts believe China is heading for an economic downturn on that scale. But there are growing concerns about what the stock price rollercoaster reveals about the health of the world’s second largest economy. More...

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