Chinese Stock Market Bubble (2015)

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The 2015 Chinese stock market bubble was a significant financial event that began with a sharp increase in stock prices from mid-2014 to June 2015. During this period, the Shanghai Composite Index nearly doubled, driven by speculative buying and margin financing. The government encouraged investment, leading to a surge in new accounts and stock purchases on margin. However, the bubble burst on June 12, 2015, resulting in a rapid decline in stock values. By July, the market had lost nearly a third of its value, prompting widespread trading halts. The government intervened with measures such as restricting short-selling and banning major shareholders from selling. Despite these efforts, the market continued to experience volatility, including a notable "Black Monday" on August 24, 2015. The crisis raised concerns about China's economic stability and the effectiveness of government interventions. The market eventually stabilized, but the event highlighted the risks of speculative bubbles and the challenges of managing financial markets. The episode also underscored the importance of regulation and investor education in preventing similar crises in the future.