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The S&P 500 slumped 1.8% on Monday and Tuesday, thanks to China Evergrande, the Chinese property company that looks like it is ready to default on its more-than $300 billion in debt. Cries of the next Lehman Brothersβor maybe the next Silverado?βechoed through the canyons of Wall Street as investors prepared for the worst.
Chinaβs stock markets are some of the largest in the world, with total market capitalization reaching RMB 79 trillion (US$12.2 trillion) in 2020. Chinaβs stock markets are seen as a crucial tool for driving economic growth, in particular for financing the countryβs rapidly growing high-tech sectors.Although traditionally closed off to overseas investors, Chinaβs financial markets have gradually been loosening restrictions over the past couple of decades. At the same time, reforms have sought to make it easier for Chinese companies to list on onshore stock exchanges, and new programs have been launched in attempts to lure some of Chinaβs most coveted overseas-listed companies back to the country.
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