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Shanghai Composite index and China's 2015 stock crash
Launched 1991; crash June 2015· Concept
Fact, law or dataA rule, statute, definition or measured number.
The main index of all Shanghai-listed shares; in 2015 it soared on borrowed money, then lost over 40% in about ten weeks.
See it on the Money & Finance map →How it works
Launched in July 1991 (base 100 in December 1990), it peaked at 6,124 in October 2007. In 2014–15 state media cheered stocks, and investors borrowed through brokers' margin accounts and unofficial lenders. The index more than doubled to 5,166 by June 12, 2015. A crackdown on grey-market margin set off forced selling; by August 26 it was down about 43%. Beijing halted IPOs, barred big holders from selling, let about half of listed firms suspend trading and had state funds buy.
Why it matters
It showed how leverage and policy signals can drive a retail-heavy market, and how far Beijing will go to stop a crash.
Facts, rules and data
Exchange price data, CSRC margin statistics and rescue announcements, and studies of the 2015 boom and bust by the IMF and academic economists.
Debates and risks
Whether the rescue prevented wider damage or only delayed it; the index was still far below its 2007 and 2015 peaks at its 2025 decade high.
Connections (2)
▸Leverage: amplifying gains and losses with debt fueled the 2015 boom and bust in Shanghai Composite index and China's 2015 stock crashFact, law or data
The connection
In 2014–15 brokers' margin loans reached about 2.27 trillion yuan, and unofficial lenders offered far more leverage, sometimes several times an investor's cash. Rising prices drew more borrowing. When regulators cracked down on grey-market margin in June 2015, margin calls forced sales, which pushed prices down and set off more margin calls.
When and why
Shanghai and Shenzhen, mid-2014 to mid-2015; the CSRC, brokers, trust companies and online lending platforms.
How we know
Official margin-debt statistics from the exchanges, CSRC announcements, and later IMF and academic studies of the margin spiral.
Debates and risks
How much unofficial borrowing there was; estimates vary widely because much of it was off the books.
▸Shanghai Composite index and China's 2015 stock crash crashed 40%-plus in 2015, a classic case of Bull markets, bear markets and correctionsFact, law or data
The connection
The index more than doubled in a year, a textbook bull market, then fell about 43% between June 12 and August 26, 2015, and nearly half by early 2016, a bear market far past the usual 20% threshold. A new circuit breaker in January 2016 was scrapped after four days.
When and why
Shanghai, June 2015 to January 2016.
How we know
Index price records and regulators' announcements of the January 2016 circuit breaker and its suspension.
Debates and risks
Whether government buying shortened the bear market or prolonged the pain by holding prices above where buyers would trade.