China’s ‘Black Monday’ is just the start

One-party states are rarely any good at admitting to any form of blunder. It is certainly the case with China’s prickly political leaders, who love to flood domestic media with jolly tales of fashion shows and bamboo-chomping pandas – anything to divert people’s attention from a flagging economy and rising unemployment.

This makes today’s main headline on China Daily‘s website all the more arresting: ‘Stocks plunge most since 2007 as state support measures fail’ the state-run newspaper blared, after the Shanghai Composite share index lost 8.5 per cent in a single day. The wider world followed China’s lead: all major Asian stock indices fell on Monday, with oil tumbling to a six-year low. Even gold prices, usually a safe haven in bad times, inched down. By early afternoon, the FTSE 100 was trading 4.5 per cent lower, wiping more than £70bn off the value of UK blue-chip stocks in just five hours; shares in New York will surely follow the downward procession when they open later today.