How Chinese Shares Went Haywire: ‘The Market Is Completely Unstable’

How Chinese Shares Went Haywire: ‘The Market Is Completely Unstable’

Chinese stocks crashed in recent days, only to rebound with unprecedented force. To some investors, the recovery was nearly as worrying as the selloff.

The turbulence follows a year-long slide that had already caused widespread investor losses. Trillions of dollars in market value across American depositary receipts, Hong Kong shares and other Chinese stocks have evaporated as Beijing pursued a series of regulatory crackdowns and as the global appetite for riskier, high-growth shares has waned.



This month, however, the turmoil reached a new pitch, as investors worried about whether China could suffer Russian-style financial isolation, while more bad news emerged on Covid-19 and on regulatory pressure from both Beijing and Washington.



In recent days the market was gripped by panic selling, in one of the biggest episodes in the history of China ADRs, said Tony Chin of Infini Capital Management Ltd.





“People were basically selling with no price limit—they just wanted to de-risk,” said Mr. Chin, the founder and chief executive of Infini, a Hong Kong-based hedge fund manager.



There is a lot at stake for international investors. U.S. institutions now hold about $750 billion worth of Chinese shares of all sorts, Goldman Sachs analysts estimate, while many