Whats behind the boom and bust cycles in Chinese markets?

HARI SREENIVASAN, PBS NEWSHOUR ANCHOR:

And in China, the government might have stopped or slowed-down the mass sell-off that crashed its stock market this week.

Shares there have fallen by nearly a third in less than a month — wiping out almost $4 trillion in wealth.

After serious losses early this week, stocks actually rallied yesterday and Thursday, possibly because Beijing injected $19 billion to the country's biggest brokerage firms. The firms are using the money to buy stocks and slow down the sell-offs.

So how concerned should we be about China's stock crash and are there other looming issues beyond the stock market?

Joining us from Boston is Orville Schell, who heads the Center on U.S.-China Relations at the Asia Society.

So, Orville, just to keep in perspective, I was looking back at the charge, the two major indexes there have doubled — I mean, more than a hundred percent in the past 12 months. That still leaves them up 60 percent or 70 percent, and that's a figure most of us can't wrap our heads around.

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