China pays a price to avert stock market crash

SHANGHAI: China’s Communist government has averted a stock market crash—for now—but it will take the world’s second-largest economy longer to repair tarnished reform credentials and investment sentiment battered by its heavy-handed intervention.

After whipping and driving the Shanghai bourse up 150 percent in a year through looser monetary policy, glowing state media comment and margin trading—the use of borrowed funds on the exchange—the government was forced to intervene when sentiment turned and the market plunged 30 percent in just three weeks.