The infallibility of the communist party and by extension its leadership is a core tenet of the mantra that the Chinese people have intoned as truth for decades. So the meltdown of China’s stock market over the past three weeks must have been viewed with consternation by Chinese investors as well as the average Chinese citizen watching from the sidelines since the populace was encouraged by Beijing to invest in the country’s own brand of capitalism. Failure to stop a sell-off would lead to a broadbased loss of confidence that could undermine the leadership’s reform efforts, the economy and potentially lead to social unrest—the biggest fear of the leadership. Consequently, the rest of the world’s angst over Beijing’s direct market intervention rather than allowing free market forces to clear markets is relegated to a far distant secondary concern by the country’s leaders.
