Dragons that breathe ice

The strange ways that China’s authorities deal with stock markets and snow

When two of your major share indices are running riot, what is the best way to deal with them?

The Shanghai and Shenzhen exchanges have been all over the place in 2015, reaching seven-year highs, then racking up weeks of record lows, and it has caused Beijing something of a headache.

Like the thick flocks of starlings swaying and bunching on a wing’s flinch, the millions of individual investors in those indices seem to charge in and then flee on pieces of news that scare them and then entice them. This sends the markets dizzy: the Shanghai Composite has had more than $3tn wiped off its value and has suffered huge daily and weekly crashes over the last month. But then again its overall value is up 75% year-on-year.

So how to deal with these market jitters? China has something called the Securities Regulatory Commission which has decided the best way to sort out all these fickle stocks backed by margin traders is to wade in and prop up the market.

A series of measures were introduced including a ban on short-selling, the suspension of trading in more than 2,000 shares and a massive cash injection into money markets.

It is a massaged manipulation of the markets and risks sending out the wrong signals back home (to investors who may interpret a false stability) and abroad (to fellow economies worried about the combined size and whimsical nature of the country’s public face in markets).

This economic volatility did not manage to derail the arrival of a second Olympic and Paralympic Games to the capital. Beijing’s Winter 2022 campaign narrowly to beat its one rival in the voting process – Kazakhstan’s Almaty – but questions have already been raised over the worrying lack of snow in the location where the ski and snowboard events will take place.

And as we have seen with the stock markets, the Chinese authorities have no qualms rolling out some eyebrow-raising measures to deal with a problem in the country. And when you are awarded a Winter Olympic Games in a city that has dry winters and no snow there can be no more assured way of dealing with the issue than to fire huge waves of fake flakes all over the mountain.

Beijing will not be the first to use artificial snow: Russia turned to it last time out in 2014 for use in the Black Sea resort of Sochi where the Games were held. And if Dubai can manage to have a novelty winter sports industry and Russia can host a working Olympics then there is no reason that Beijing 2022 cannot be a successful games. But bringing snow to the mountains is one thing, and inspiring a new generation of artificial winter sports enthusiasts is another.

It does seem that no matter how damaging a situation may appear – be it wild swings on the stock markets or alpine sports in a desert – the country’s rulers believe they can overcome any hurdles with fanciful measures that in reality only offer short-term relief.