China's Desperate Stock Market Rescue Could Trigger a US Crash

China is reportedly taking an extraordinary step to stop its stock market from crashing. Beijing tried the same strategy in 2015. It failed to contain the selloff, and weeks later, Wall Street suffered one of its worst trading days in years. According to the Financial Times , Chinese regulators have privately instructed investment banks to pause new IPO applications and delay large share sales. Reuters could not independently verify the instructions. The idea is that fewer new shares competing for investors’ money could reduce selling pressure on existing stocks. But history shows that its impact could spread to the US stock market. China Tried This in 2015. Wall Street Crashed Weeks Later In July 2015, Beijing suspended IPOs and banned major shareholders from selling for six months.

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