from Wall Street On Parade:
The Shanghai stock exchange, which has been creating global stock market convulsions while trimming 39 percent off its value since June, will be closed for the next two days. The Chinese holiday started on Thursday in Beijing with a big parade and show of military might to commemorate the 70thanniversary of V-Day and the defeat of Japan in World War II.
The massive military pageantry and display of weaponry was widely seen as a move by President Xi Jinping to reassert his authoritarian rule in the wake of a sputtering domestic economy, $5 trillion in value shaved off the stock market in a matter of months, and the need to devalue the country’s currency on August 11 in a bid to boost exports.
Tragically, what has received far less attention than melting China stocks is the mass arrests of dissidents, human rights activists, attorneys and religious leaders. More recently, the government has begun to “detain” journalists and finance executives in an apparent attempt to scapegoat them for the stock market’s selloff.
The mass arrests began in July, the same time the China stock market started to crater in earnest. Last evening, the Financial Times had this to say about the disappearance of Li Yifei, a prominent hedge fund chief at Man Group China.
“The whereabouts of Ms Li remained unclear on Wednesday. Her husband, Wang Chaoyong, told the Financial Times that her meetings with financial market authorities in Beijing had concluded, and ‘she will take a break for a while.’ ”
Bloomberg Business had previously reported that Li Yifei was being held by the police as part of a larger roundup of persons they wanted to interview regarding the stock market rout.
The reaction to these authoritarian sweeps has worsened the stock market situation in China. Volume on the Shanghai market, according to the Financial Times, has skidded from $200 billion on the heaviest days in June to just $66 billion this past Tuesday.
On Tuesday afternoon, a Wall Street Journal reporter was interviewed by phone from Beijing on the business channel, CNBC. He said “waves” of arrests were taking place. That interview followed an article in the Wall Street Journal on Monday, which appeared with no byline (perhaps for the safety of the Beijing-based reporter) that shed more light on the arrests:
“Chinese police on the weekend began rounding up the usual suspects, which in this case are journalists, brokers and analysts who have been reporting stock-market news. Naturally, the culprits soon confessed their noncrimes on national television. A reporter for the financial publication Caijing was shown on China Central Television on Monday admitting that he had written an article with ‘great negative impact on the market.’ His offense was reporting that authorities might scale back official share-buying, which is what they soon did. On Sunday China’s Ministry of Public Security announced the arrest of nearly 200 people for spreading rumors about stocks and other incidents.”
Also on Tuesday, David Saperstein, the U.S. Ambassador-at-large for religious freedom, publicly demanded that China release attorney Zhang Kai and religious leaders who had been swept up by the government the very day before Saperstein had been scheduled to meet with them. In an interview with the Associated Press, Saperstein called the state actions “outrageous,” particularly since he had been invited to China to observe religious freedom in the country.
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