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China’s Great SSE Wall

Published on 14 July 2015
Updated on 05 April 2024

(A 9000 km long analogy)

Recently, the stock exchanges of China, first among them the SSE (Shanghai Stock Exchange), took a bad fall:

2015 – Performance of SEE


Source: https://on.ft.com/1MqNG2p

The Chinese government intervened to stem the downside slide: “The securities regulator also made a mistake by treating the stock market index as if it should determine policy.”[1] The Regulators’ intervention was brutal, if effective.

Having attained “harmony” (of sorts) concerning its people, one gets the feeling that the Chinese Government felt obliged or emboldened to bring “harmony” to the markets. This intervention is understandable, for the two realms are linked. Material wealth undergirds political stability. The Chinese middle class is building a nest-egg for its old age and unlikely to take kindly to it evaporating in a few SSE sessions.

Eschewing the details, what the government seems to have undertaken is to build a Great SSE Wall, behind which fortunes and pension rights be made safe. Three thousand years ago, the Chinese built a Great Wall.[2]

Will there be lasting harmony on the SSE? Economists are shaking their heads – markets are wild, and financial innovation is enhancing their ability to circumvent regulators. Like the nomads from the steppes, they can easily ride along the wall until they find a break.


A question is nagging me, however: was the purpose of the Wall to keep the raiders out? Maybe the Wall was to help the Chinese armies (stationed behind the Wall) to corner the nomads on their way back from the raid and laden with loot. After all, the Chinese mindset – as set out in say the famous Romance of the Three Kingdoms[3] – is how best to deal with silent transformations, rather than preventing them.

Under Western financial influence, the Chinese government may be straying from traditional Chinese thinking – and embark, like Josiah, on “stopping the sun’s progress.” It only happened once, if at all.


[1] https://bit.ly/1Jf3qT0

[2] Arthur WALDRON (1992): The Great Wall of China. From history to myth. Canto, Cambridge University Press, Cambridge; Anita LOVELL (2006): The Great Wall of China. China against the world (1000 BC – 2000 AD). Atlantic Books, London.

[3] https://en.wikipedia.org/wiki/Romance_of_the_Three_Kingdoms

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