From VOA Learning English, this is the Economics Report. The last two months have been difficult for investors in China's (1) markets. Major stock indexes, measures that track share values, all had big decreases during the month. This has many people (2) what China's stock market problems mean for its economy and the world. On July 27th, the Shanghai Composite index dropped more than eight percent in value, its (3) single-day drop in eight years. In recent weeks, prices dropped although the government put a number of (4) in place to keep prices from falling too far. These included lending billions of dollars to stock trading companies, having (5) funds increase stock holdings and threatening short-sellers with legal action. Short-sellers make a profit by trading stocks that are (6) in prices. The state China Securities Finance Corporation on Tuesday said it will continue to buy stocks to "stabilize" the market. The People's Bank of China also said it would place over $8 billion into money markets funds, which are considered safe debt investments. Companies have also cancelled plans to sell new shares on (7) and, at one point, more than 1,400 companies requested that trading in their shares be halted. However, China's stock market is not closely connected to its economy. The Associated Press recently reported on a study by the Southwestern University of Finance in Chengdu, China. It said only 8.8 percent of households in China are involved in the market. That is much lower than the 30 percent of households in the U.S. with investment in the market. Many of the companies (8) Chinese markets are state-owned companies. Investors react to changes in government regulations and to availability of financing for trading. This can mean that share prices do not follow the economic performance of the companies that issue them. In the twelve months before June, China's stock market measures gained about 150 percent. At the same time, China reported lower economic growth during the same period. China's share price drop has had a (9) effect on stock exchanges around the world. Stock indexes in Europe and Asia have had decreases in July. But, China limits the number of stocks that foreign investors can buy through a link called the Shanghai-Hong Kong Stock Connection. In the case of China, that means money from foreign investors cannot easily (10) in or out. Some experts say recent losses could be a sign that Chinese investors are worried that the government plans to reduce its support for the market. And that's the Economics Report. I'm Mario Ritter.
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