The New York Times reports: "The market turmoil in China spread around the world, as global investors grew more anxious about the country's currency and the health of its economy. Chinese stocks plunged on Thursday, by more than 7 percent, forcing officials for the second time this week to halt trading for the day — in this case, after just 29 minutes. The aftershocks carried over to Europe and the United States, where markets fell sharply once again. Coming off a sell-off on Wednesday, the Standard & Poor's 500-stock index and the Dow Jones industrial average fell 1.6 percent in the opening minutes of trading....On Thursday morning before the stock market opened, China's central bank set the rate for the renminbi at 6.5646 to the dollar, its lowest point in almost six years. When stock trading opened, investors dumped shares, once again shutting down the market....Managing the currency is becoming harder for China. Investors, most of them domestic, are moving money out of the country before the buying power of the renminbi slides further.... As for the broader effects of China's problems, Mr. Halpenny, the London analyst, said, 'There has to be a point when the market sensitivity to Chinese devaluations declines.' 'We don't expect this degree of volatility to continue," Mr. Halpenny said. "But it looks like it's going to be an interesting year.""
CNN reports: "As world powers work to verify North Korea's claims that it has tested a hydrogen bomb, others are asking what the country's only real ally -- China -- will do. On Wednesday, China's Ministry of Foreign Affairs released a statement that it 'firmly opposes' this and any future nuclear tests by North Korea. Spokeswoman Hua Chunying told reporters that Beijing had not been given advanced warning of the test and would be summoning Pyongyang's ambassador to lodge a protest....Relations between Pyongyang and Beijing have been frosty since Kim Jong Un succeeded his late father as dictator, promptly purging several key government figures -- such as his uncle Jang Song Thaek -- with strong ties to China....'A key barometer of how angry the Chinese are will be how much and in what way they try to water down any U.N. resolution,' said Chinoy.The Security Council held an emergency meeting on Wednesday, the first step towards imposing new sanctions. In a statement, the Council reiterated its intention to take 'further significant measures" against North Korea.' 'This is one of the few occasions in the world where China, U.S., Russia really need to agree on something,' said Victor Gao, director of the China National Association of International Studies."
The Economist reports: "BIG swings in the Chinese stockmarket are par for the course. But even by its wild standards, the alacrity of its latest crash was stunning. Just 13 minutes into trading on Thursday, the CSI 300 index of blue-chip stocks fell 5%, triggering the first circuit-breaker: a 15-minute pause for traders to supposedly regain their cool. When the action resumed, it lasted all of one minute before the second and final circuit-breaker was hit: the CSI 300 fell 7%, which necessitated a closure of the market for the rest of day. Trading, in other words, lasted all of 14 minutes before being halted....But while the swings of the Chinese market defy explanations most of the time, there is actually extensive research to help explain the dynamics of the latest crash. For the culprit, look no further than the circuit-breakers that regulators introduced at the start of this week. Only four days into operation, they have already been triggered in much the same manner twice: with the 5% threshold hit first and then full closure at the 7% level soon after. The theory of circuit-breakers is that they are supposed to help calm an over-excited market. In China's case, it appears that they have done just the opposite: encouraging traders to lock in sell orders to make sure they are the first to escape the market before the bottom falls out....The latest update is that the securities regulator has called an unscheduled meeting to discuss the circuit-breakers, according to Bloomberg. If only they had bothered to discuss them properly before implementation."