The $600bn reason why China’s stock market crash might get a whole lot worse.

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  • Chinese stocks have lost more than 30% of their value since the start of 2018.
  • Fears of a slowing economy, rising debts and the impact of US President Donald Trump’s trade war have all played a role in pushing the Chinese market lower.
  • However, a wave of forced selling of company shares could see the market drop even more.
  • Hundreds of Chinese companies use their shares as collateral for loans, and are forced to sell when their share price drops below certain levels.
  • Analysts believe this trend is likely to exacerbate the major declines already seen in Chinese markets this year.
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