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Market falls threaten to expose cracks in corporate China

Rapid increase in leveraged trading raises fears of forced selling that could trigger broader financial instability

Retail investors dominate in China, making up 80 per cent of the market. They are seen to be most at risk from margin calls when a brokerage demands additional money or collateral because the value of an investment has fallen.


DESPITE reassurances by regulators that margin debt in China's stock markets remains manageable, total leverage could be as much as US$645 billion - magnifying risks not just for retail investors, but also the thinly stretched corporate sector.

The scale of lending in