Commentary: China’s Stock Market Has Weathered the Deleveraging Storm

The tech-driven market slump that began in July is not unique to China’s A-shares. Equity markets in the U.S., Japan and South Korea have all experienced similar pullbacks. However, beyond industry-specific headwinds, global markets are currently sharing another common catalyst for volatility: the accumulation and subsequent unwinding of leverage.

As Chinese equities have trended downward, investors are grappling with a critical question: How far along is the deleveraging process in the A-share market, and is there still a tail risk of a violent margin call?