This Day in History: The 2007 China Stock Market Crash

By Ned Kelly, February 26, 2021

1 0

On February 27, 2007, the Shanghai Stock Exchange tumbled 9% from unexpected selloffs, the largest drop in 10 years. The fall triggered major drops in worldwide stock markets, including Wall Street, which suffered its largest single fall since 9/11, earning the crash the moniker the ‘Shanghai Sneeze.’

Also known as the ‘Chinese Stock Bubble of 2007’ and the ‘Chinese Correction’ – Zhongguo Jiaozheng 中国校正 – the fall was caused by rumors that the Chinese governmental economic authorities were to introduce varying policies that would restrict foreign investment, from capital gains tax to raising interest rates to a clamp down on speculative trading with borrowed money.

READ MORE: What to Know about China's Major Stock Exchanges

The ensuing plunge in Asian markets sent ripples through the global market, as the world reacted to the meltdown, triggering drops and major unease in nearly all financial markets around the world, and wiping out hundreds of billions of market value. 

The Dow Jones Industrial Average in the US dropped a staggering 3.29% amid fears for growth prospects, with sell orders made so fast that an additional analysis computer had to be used.

Subsequent rumors circulated around the world that the drop may have been due to an erroneous trade, but this was never confirmed. Within three weeks Shanghai had recouped its losses.

At the beginning of February in 2020, the markets experienced a similar sell-off, with both Shanghai and Shenzhen composites falling nearly 10% on the first trading day after China’s Spring Festival holiday. At the time, the world was watching as China battled the novel coronavirus outbreak, which had taken 300 lives in the country at the time.

READ MORE: Chinese Stocks Plunge 9%, Largest Since Global Financial Crisis


For more, This Day in History stories, click here.

more news

This Day in History: China-India Nathu La Pass Reopens for Trade

The historic Nathu La Pass in the Himalayan mountains reopened for trade after 44 years.

This Day in History: Seoul Falls to North Korea

The conflict between South Korea (ROK) and North Korea (DPRK) has lasted for over 70 years.

This Day in History: Artist Chiang Yee Honored with Blue Plaque

Only the third blue plaque honoring a Chinese person.

This Day in History: China Signs the UN Charter

Chinese leader Chiang Kai-shek signed the UN charter, which was signed by representatives from 50 nations.

This Day in History: The Charging Bull on the Bund

Arturo Di Modica's "redder, younger and stronger" Wall Street Bull.

This Day in History: Train Robbing Bandits & the Lincheng Outrage

The capture of famed foreigners and journalists made this a major international event in China's history.

This Day in History: Nixon Signs Shanghai Communique

On February 27, 1972, President Richard Nixon and Premier Zhou Enlai signed the Shanghai Communique, a document that has remained the basis for Sino-American relations ever since.

This Day in History: Pearl S. Buck's 'The Good Earth' Published

Hailed in the West as the most important book about China since ‘The Travels of Marco Polo’.

0 User Comments

In Case You Missed It…

We're on WeChat!

Scan our QR Code at right or follow us at thatsonline for events, guides, giveaways and much more!

7 Days in China With thatsmags.com

Weekly updates to your email inbox every Wednesday

Subscribe

Download previous issues

Never miss an issue of That's Magazines!

Visit the archives