The Chinese authorities are reported to have arrested up to 200 people including brokers, regulators and journalists to silence those whom they say have spread 'false rumours' and speculated illegally to undermine stock markets.
Markets are trading just over 1% lower in Shanghai and Shenzhen at the moment – Wall Street remained relatively calm yesterday with the Dow Jones and S&P indices closing between 0.5% and 1% lower.
Latest official figures published in China last night indicate the country’s key manufacturing sector contracted at its fastest pace in three years last month. The official Purchasing Managers’ Index fell to 49.7 in August, down from a previous reading of 50. Any measure below 50 indicates contraction.
Meanwhile the Chinese Embassy in London has written an interesting letter o the Editor of The Telegraph today about the devaluation of its currency the Yuan, one of the triggers of recent sharp falls on global stock markets.
He writes, “The main driving-force for China’s economy is domestic consumption. Given the current level of domestic demand there is no need to prop up growth by stimulating exports through currency depreciation."
