China's stocks and currency start with big tumbles. ONE of the many oddities of the topsy-turvy world of Chinese finance is that red is green and green is red. In China, however, red is auspicious and so is the colour for stocks that make gains; green is for the losers.

But when the door opened, it was a flood of green. These are intended to restore calm when the markets are in a frenzy.

China's 'Black Monday' sends markets reeling across the globe - as it happened | Business | The Guardian

That triggered another circuit breaker, prompting a suspension in trading for the remainder of the day. It started the year with a 0. The central bank set its daily reference rate below 6.

It is certainly under pressure to do so. Local companies are positioning themselves for a weaker yuan, driving the hefty capital outflows of recent months. Regulators have started to relax the many extraordinary measures they had taken in recent months to prop up the market.

Some of the selling was in anticipation of that. The new circuit breakers, far from calming investors, may have exacerbated the sense of panic. The economy also appears to be on much the same path as last year: Nevertheless, it is surely not the kind of start to that Chinese authorities were hoping to see from their financial markets.

They have consistently claimed that their stockmarket rescue was only meant to be temporary. Yet if the sell-off continues, it would not be surprising to see them wade in once again. As for the yuan, the central bank has signalled that it is willing to see depreciation, at least against the dollar.

Its resolve may now be tested: Media Audio edition Economist Films Economist Radio The Economist apps. Other Publications Magazine The World In The World If. Media Audio edition Economist Films Economist Radio.

Why China’s Market Crash Is So Unsurprising

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Why China’s Market Fell So Much - WSJ

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What has led to China's stock market crash? - BBC News

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