China's benchmark stock index plummets 8 percent, spooking global markets

At the Shanghai Stock Market, how low can it go? — (Image credit: Ohannes Eisele/AFP/Getty Images)

China's benchmark Shanghai Composite Index dropped 8.5 percent in early Monday trading, wiping out the year's gains, as a string of weak economic data and Beijing's recent currency devaluations sent investors scrambling to safer assets. Other bourses in the region followed suit, with benchmark indexes from Hong Kong to Australia shedding more than 2 percent.

"Markets are panicking," said analyst Takako Masai at Shinsei Bank in Tokyo. "Things are starting look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable." China is the world's No. 2 economy, and investors are betting that its economic slowdown is worse than official government data indicates. With Monday's losses, the Shanghai Composite is down about 37 percent from mid-June.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.