Repeat after me: The stock market is not the economy. And the economy is not the stock market.
While I certainly agree, no one else does. The DotBomb, Great Recession, and China Syndrome all flow from the same issue: the financial sector subverts both the economy and the regulators. Quants too lazy to dig ditches, but not smart enough to do real engineering. And they get to make their own rules. Yes, there are and must be regulators, otherwise you're left with "Lord of the Flies", played in real life by adults. Not a long term solution.
Since China has little to no social safety net (and Right Wingnuts insist this is a Communist country?), there's been a steady push to financialize. This in the prime manufacturing economy on the globe. And it can't absorb its domestic Giant Pool of Money???
Anyway, real estate has been the vehicle of earning return. But as we all know, don't we, that real estate returns are contingent upon mortgage holders' increasing *real* income. Without that, it's all smoke and mirrors. As it has been in China for at least a couple of decades.
But others in the long list of actions China has taken to try to shore up the market seem focused more on directly propping up the market itself and less on containing the consequences of the market sell-off. There was the June 29 decision for local government pensions to invest in stocks for the first time, a July 1 relaxation of securities trading fees, a July 2 relaxation of rules on margin trading to make it easier for people to make risky bets on stocks and a July 5 decision by a state-owned investment fund to buy more stocks.
If that sounds rather like Quantitative Easing, well, yes, yes it does. While Obambi and his clique might argue otherwise, the fact is that the moolah went to Mr. Market and by-passed Main Street and Ma and Pa Kettle. I guess what's sauce for the goose is less so for the gander; if there's an agenda at work.
No arm of the American government tried to prop up the stock market through outright purchases of stock during either the dot-com bubble crash or the 2008 financial crisis. (Perhaps capital injections into troubled banks in 2008 are an exception, though those interventions were targeted at propping up the banking system, not the stock market as a whole.)
GM and AIG might not see it that way. While not across-the-board buying, the agenda was the same.