Where next for China's stock market?

摘要

China's stock market does not tell us much about the real economy, but it is a high profile indicatorthat is driving and reflecting sentiment. With that in mind, below is a broad brush approach to theoutlook for the Shanghai market.The message is that in the absence of government intervention China's stock market could fallanother 30% from today's level, remaining a source of negative sentiment for the world economy andfor commodities. Attempts by the government to prop up the market would likely be taken as evidencethat the government is backing away from reforms, which would also be negative for sentiment.