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China stock market crisis: what UK national newspapers think China stock market crisis: what UK national newspapers think
(34 minutes later)
The great fall of China. It was a pun too good to miss for the Daily Mail (page 1), the Sun and the Times. It kept company with the most used cliché of the day, the one about China sneezing and the rest of the world getting a cold.The great fall of China. It was a pun too good to miss for the Daily Mail (page 1), the Sun and the Times. It kept company with the most used cliché of the day, the one about China sneezing and the rest of the world getting a cold.
In various guises, it appeared in the Guardian, Independent, Daily Express, Daily Mirror and the Sun. But the Sun deserves special mention for the pun over its editorial, Chinese burn.In various guises, it appeared in the Guardian, Independent, Daily Express, Daily Mirror and the Sun. But the Sun deserves special mention for the pun over its editorial, Chinese burn.
There was little to laugh about as the crop of large front page headlines illustrated: “Trillion wiped off markets in day of panic” (Times); “Black Monday risks a new financial crisis” (Daily Telegraph); “China urged to end market turmoil” (Guardian); “Markets take a plunge” (Independent); “Shares crisis hammers pensions” (Express) and “Global stocks sell-off as China’s ‘Black Monday’ darkens markets” (Financial Times).There was little to laugh about as the crop of large front page headlines illustrated: “Trillion wiped off markets in day of panic” (Times); “Black Monday risks a new financial crisis” (Daily Telegraph); “China urged to end market turmoil” (Guardian); “Markets take a plunge” (Independent); “Shares crisis hammers pensions” (Express) and “Global stocks sell-off as China’s ‘Black Monday’ darkens markets” (Financial Times).
The seriousness of the situation was underlined in leading articles, although most sought to calm readers. The Times began by noting that markets had “behaved as if a crash similar to that of 1929 was looming” and “in the heat of the moment it seemed as if China had reached a tipping point and was going to take its trading partners down with it.”The seriousness of the situation was underlined in leading articles, although most sought to calm readers. The Times began by noting that markets had “behaved as if a crash similar to that of 1929 was looming” and “in the heat of the moment it seemed as if China had reached a tipping point and was going to take its trading partners down with it.”
But it said: “The turmoil is, despite the high dependency of the world’s economies on the health of China, unlikely to start a slide towards apocalypse.”But it said: “The turmoil is, despite the high dependency of the world’s economies on the health of China, unlikely to start a slide towards apocalypse.”
It was unimpressed by “clumsy Chinese government interventions” and thought “the root of the crisis is the obscurity of Beijing’s intentions and the true state of the national economy. Quite simply, no one knows how bad it can get.” It concluded:It was unimpressed by “clumsy Chinese government interventions” and thought “the root of the crisis is the obscurity of Beijing’s intentions and the true state of the national economy. Quite simply, no one knows how bad it can get.” It concluded:
“It is clear that China is slowing down much faster than anticipated... If the Chinese model really has run its course, the impact will be shattering. Yet the fundamentals that earned the label of the Chinese century are still largely in place.“It is clear that China is slowing down much faster than anticipated... If the Chinese model really has run its course, the impact will be shattering. Yet the fundamentals that earned the label of the Chinese century are still largely in place.
What is needed is transparency. China must also let its markets function more freely and accelerate the shift from an export-led economy towards greater consumption at home... In the meantime there is no need to stockpile pickled cabbage or storm the ATMs.”What is needed is transparency. China must also let its markets function more freely and accelerate the shift from an export-led economy towards greater consumption at home... In the meantime there is no need to stockpile pickled cabbage or storm the ATMs.”
The Telegraph’s editorial, “China learns a hard lesson in economics”, also criticised the “seemingly incompetent response” by the Chinese government in its “desperate attempts to prop up China’s over-inflated stock market.”The Telegraph’s editorial, “China learns a hard lesson in economics”, also criticised the “seemingly incompetent response” by the Chinese government in its “desperate attempts to prop up China’s over-inflated stock market.”
However, it argued that “the panic has served to remind us of the fragility of Britain’s economic recovery, and how vulnerable a highly indebted world economy is to continued crisis and setback.” It contended:However, it argued that “the panic has served to remind us of the fragility of Britain’s economic recovery, and how vulnerable a highly indebted world economy is to continued crisis and setback.” It contended:
“China is being forced to learn the hard way what traditional practitioners of market-based economics have known all along - that you cannot buck the markets and that economic development never proceeds in a straight line.“China is being forced to learn the hard way what traditional practitioners of market-based economics have known all along - that you cannot buck the markets and that economic development never proceeds in a straight line.
The belief that China’s own peculiar form of authoritarian, state-sponsored capitalism could somehow defy the usual laws of economics always did look deluded.”The belief that China’s own peculiar form of authoritarian, state-sponsored capitalism could somehow defy the usual laws of economics always did look deluded.”
Given that China is responsible for such a large proportion of the global economy, the Telegraph thought it “capable of inflicting far more damage on global sentiment and confidence.Given that China is responsible for such a large proportion of the global economy, the Telegraph thought it “capable of inflicting far more damage on global sentiment and confidence.
“At the very least, its slowdown threatens to spark a rolling series of debt and currency crises in emerging markets... Small wonder that stock markets are panicking.”“At the very least, its slowdown threatens to spark a rolling series of debt and currency crises in emerging markets... Small wonder that stock markets are panicking.”
The Financial Times also thought “China’s initial reaction to the turmoil was less than impressive.” It urged Beijing not to panic, arguing that it should “think hard about how it might boost consumption.” The FT, as with others, demanded transparency:
“It should be public about its conclusions, however much this may go against the grain. Markets and the wider world need confidence in the existence of a plan, given the absence of the monetary and fiscal tools common to market economies.”
The market plunge, said the paper, “is a reminder that there are risks in investments and it is not the job of central bankers to protect the value of people’s assets.
As the Chinese public is learning, and the developed world may have forgotten in recent years, this is part of normality too.”
The Guardian, likening Beijing to “a swaggering pre-crash financier”, argued that “in recent months, the regime has been having to do ever more to achieve ever less.”The Guardian, likening Beijing to “a swaggering pre-crash financier”, argued that “in recent months, the regime has been having to do ever more to achieve ever less.”
It had created “an extraordinary stock bubble, by enticing people of modest means into the market” and then “became visibly terrified of a burst”, with restrictions imposed on a sell-off of shares. It continued:It had created “an extraordinary stock bubble, by enticing people of modest means into the market” and then “became visibly terrified of a burst”, with restrictions imposed on a sell-off of shares. It continued:
“Instead of soothing nerves, these measures only stirred new concerns about why they had been necessary at all. Beijing’s grip on events loosened again in the eyes of the world after it allowed the yuan to slide over the last fortnight...“Instead of soothing nerves, these measures only stirred new concerns about why they had been necessary at all. Beijing’s grip on events loosened again in the eyes of the world after it allowed the yuan to slide over the last fortnight...
Beijing is certainly not out of options nor treasure just yet, and yet the world is losing its blind faith in the assumption that China’s often-secretive political processes can in the end be relied on to steer the nation to ever-greater prosperity.”Beijing is certainly not out of options nor treasure just yet, and yet the world is losing its blind faith in the assumption that China’s often-secretive political processes can in the end be relied on to steer the nation to ever-greater prosperity.”
The potential for China’s problems to affect the rest of the world also struck the Independent, which said: “What happens to shares in Shanghai matters a good deal to people living in Sheffield.”The potential for China’s problems to affect the rest of the world also struck the Independent, which said: “What happens to shares in Shanghai matters a good deal to people living in Sheffield.”
It pointed out that “many British pension funds now have at least some of their portfolios invested in emerging markets, and all have had a torrid time of it in recent months.”It pointed out that “many British pension funds now have at least some of their portfolios invested in emerging markets, and all have had a torrid time of it in recent months.”
The difficulties facing Beijing are the result of “a speculative boom that got going just as the China’s real economy started to slow. With an investment approach sometimes not far removed from gambling, inexperienced Chinese investors have piled in, and then piled out, with some violence.”The difficulties facing Beijing are the result of “a speculative boom that got going just as the China’s real economy started to slow. With an investment approach sometimes not far removed from gambling, inexperienced Chinese investors have piled in, and then piled out, with some violence.”
In company with other papers, the Indy also remarked on the Chinese government’s vain attempt “to buck the market.” It thought it necessary for the rest of us to accept “gyrations on global stock markets” as “the price we pay for having China continuing on the road to capitalism.”In company with other papers, the Indy also remarked on the Chinese government’s vain attempt “to buck the market.” It thought it necessary for the rest of us to accept “gyrations on global stock markets” as “the price we pay for having China continuing on the road to capitalism.”
The Sun appeared to agree: “With so much western money invested in China, and so much Chinese money invested in the west, the rest of us are going to suffer the consequences.”The Sun appeared to agree: “With so much western money invested in China, and so much Chinese money invested in the west, the rest of us are going to suffer the consequences.”
And the Mirror thought China’s shares plunge to be “a worrying but timely reminder of how vulnerable the UK is to shocks on the other side of the globe.” It saw the problem in strictly domestic terms:And the Mirror thought China’s shares plunge to be “a worrying but timely reminder of how vulnerable the UK is to shocks on the other side of the globe.” It saw the problem in strictly domestic terms:
“Alarm bells should be ringing very loudly in Downing Street as the economic weather darkens. Instead, the Europe-obsessed Tories are focusing on renegotiating Britain’s relationship with Brussels.“Alarm bells should be ringing very loudly in Downing Street as the economic weather darkens. Instead, the Europe-obsessed Tories are focusing on renegotiating Britain’s relationship with Brussels.
And Labour is mired in a chaotic leadership battle which is doing lasting damage to the party.”And Labour is mired in a chaotic leadership battle which is doing lasting damage to the party.”
The Mirror also carried an analysis by Graham Hiscott in which he echoed concerns aired in the Express and the Independent about the effect on “the persion pots of millions of Brits.”The Mirror also carried an analysis by Graham Hiscott in which he echoed concerns aired in the Express and the Independent about the effect on “the persion pots of millions of Brits.”
He concluded: “It could all turn out to be either a storm in a teacup or the start of a crisis which could plunge countries around the world, including the UK, back into recession.”He concluded: “It could all turn out to be either a storm in a teacup or the start of a crisis which could plunge countries around the world, including the UK, back into recession.”
And in the Express, commentator David Shand also warned that “with the UK stock market’s heavy reliance on oil and mining stocks, the bursting of the so-called commodity supercycle has negative consequences for share prices and pension savings.”And in the Express, commentator David Shand also warned that “with the UK stock market’s heavy reliance on oil and mining stocks, the bursting of the so-called commodity supercycle has negative consequences for share prices and pension savings.”