China Stocks Having Far Reaching Impact

The Chinese stock market recently saw its biggest selloff in eight years as the dramatic 8.5-percent fall in Shanghai “A” shares also rattled markets around the world.

For the past few weeks, China has been balancing its desire to keep the equity market from a complete meltdown, while still courting the international investment community with hopes of being a dominant player in the capital and currency markets.

But recently, the International Monetary Fund warned China’s government about its concern over limiting investors’ freedom to take equity out of financial markets. These concerns were raised when the IMF met with officials in to discuss the chances of including the yuan in the fund’s basket of currencies, also known as Special Drawing Rights.