Chinese stock prices plunge 7 percent, sparking global selloff


China started the global New Year with some bad economic news on Monday — weaker-than-forecast manufacturing activity and a currency devaluation — prompting a sharp decline in mainland Chinese equities. Trading was halted for the day on the Shanghai and Shenzhen stock markets after the Shanghai Composite Index plummeted 7 percent, triggering a "circuit breaker" mechanism China put in place late last year. The Chinese data, mixed with rising tensions between Iran and Saudi Arabia, pushed European and other Asian stock markets lower on Monday.
"A fall in Chinese markets has brought about a jittery start to the year," Investec economists said in a note. Japan's Nikkei 225 closed down 3.1 percent, Hong Kong's Hang Seng closed down 2.7 percent, and in Europe, Germany's DAX led regional losses, dropping 3.3 percent in early trading. The 10th consecutive month of contraction in China's factory purchasing indicated to investors that China's economy is not responding to government stimulus efforts, which is bad news for other nations' exports.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.
-
The pros and cons of buying a new-build house
the explainer Repairs and maintenance will be minimal on a brand new build — but moving into an existing home can be easier upfront
-
Mexico’s forced disappearances
Under the Radar 130,000 people missing as 20-year war on drugs leaves ‘the country’s landscape ever more blood-soaked’
-
The Week contest: Racoon’s regrets
Puzzles and Quizzes
-
New York court tosses Trump's $500M fraud fine
Speed Read A divided appeals court threw out a hefty penalty against President Trump for fraudulently inflating his wealth
-
Trump said to seek government stake in Intel
Speed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
-
US to take 15% cut of AI chip sales to China
Speed Read Nvidia and AMD will pay the Trump administration 15% of their revenue from selling artificial intelligence chips to China
-
NFL gets ESPN stake in deal with Disney
Speed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network
-
Samsung to make Tesla chips in $16.5B deal
Speed Read Tesla has signed a deal to get its next-generation chips from Samsung
-
FCC greenlights $8B Paramount-Skydance merger
Speed Read The Federal Communications Commission will allow Paramount to merge with the Hollywood studio Skydance
-
Tesla reports plummeting profits
Speed Read The company may soon face more problems with the expiration of federal electric vehicle tax credits
-
Dollar faces historic slump as stocks hit new high
Speed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year