This Day in History: The 2007 China Stock Market Crash

By Ned Kelly, February 27, 2020

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.

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.

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

more news

This Day in History: The Death of Puyi, China’s Last Emperor

Puyi was only 3 years old when he sat on the 'Dragon Throne.'

This Day in History: China’s First Man in Space

On this day in 2003, Yang Liwei endured a 21-and-a-half-hour flight, completing 14 orbits of the Earth

This Day in History: Weibo Launched in China

Weibo’s start came at a turbulent time as both Twitter and Fanfou were temporarily blocked in June 2009.

This Day in History: Old Shanghai’s Biggest Ever Gangster Heist

The life and crimes of Elly 'the Swiss' Wilder.

This Day in History: Bloody Saturday, Shanghai's Darkest Day

New York Times bestselling author's new book on the 1937 Japanese bombing of the city.

This Day in History: 'Terra Natura' Angels Sculpture in Lujiazui

Wu Ching-ju's pair of faceless fairies float elegantly above the ground.

0 User Comments

In Case You Missed It…

We're on WeChat!

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

7 Days in Shanghai With thatsmags.com

Weekly updates to your email inbox every Wednesday

Subscribe

Download previous issues

Never miss an issue of That's Shanghai!

Visit the archives