Economics
China Said to Halt Stock Support Amid Intervention Debate
- Officials weigh cost of rescue against risks to banking system
- Shanghai Composite Index has tumbled 15% over two days
China's Central Bank Lowers Interest Rates
This article is for subscribers only.
China’s decision to halt intervention in the stock market this week reflects a debate at the heart of the country’s leadership on the role of markets in the world’s second-largest economy.
Authorities have refrained from intervening so far this week as the Shanghai Composite Index tumbled at the fastest pace since 1996, according to people familiar with the situation. Some officials argue that market losses will have a limited impact on economic growth and the costs of support are too high, said one of the people, who asked not to be identified because the deliberations are private. Officials who back the rescue effort say tumbling shares pose a risk to the banking system, the people said.