So far as the stock market acts as a barometer of the economy its correction and subsequent reaction of the Government reflects the following :
Having said that , it was apparent that CHINESE STOCK market has lost its touch with reality . The signs of the huge manufacturing machinery of China slowing down was all across the place .
However it was expected that China will have a soft landing which was well planned , without any contagion effect on other markets .
When it became apparent that the landing will not be that soft investors started to panic,
However China has deep reserves and strong central control . They may not grow at the same pace as in the past , but they will continue to grow and prosper .
Unless the contagion spreads to other markets and situation worsens , things are under control . We have to keep a close watch on China economy for clues of the future direction .