China Doesn't Look That Bad Compared With Past Market Meltdowns
Volatility in Shanghai shares is lower than in other major market selloffs
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Losing $5 trillion in China’s equity-market rout in just two months is bad. But measured by the intensity of the price swings, the selloff still fails to stand out among past market meltdowns.
China has the world’s most volatile stocks right now after Greece, yet the fluctuations are 30 percent lower than the average of six financial market crashes, including the ones in 1929 in the U.S., Japan in the early 1990s and Thailand in 1997. The 43 percent decline so far in the Shanghai Composite Index looks modest when compared with a 78 percent peak-to-bottom retreat during the bursting of the dot-com bubble in 2000 and an 84 percent slump in the Russian market following the 1998 default.