After its market intervention, Beijing faces other challenges

ONE can debate the merits of the Chinese government's intervention in the country's equity markets, but what is more certain is that Beijing now faces a number of challenges because of the actions it has taken to try and rein in a stockmarket crash.

Recent weeks have been a nightmare for Chinese stocks. The Shanghai Composite Index fell as much as 32.1 per cent in just one month after hitting a one-year closing peak of 5,166.35 on June 8. The government stepped in on a number of occasions to try to stem the slide. In late June, interest rates were cut and pension funds were allowed to increase equity allocations. In early July, the …