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Black Monday: Five Things You Need To Know About China's Stock Market Crash

Five Things You Need To Know About 'Black Monday'
Aubrey Allegretti
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The world's second-largest economy tanked spectacularly this week, sending the Chinese stock market into free fall before causing shockwaves across the globe.

Here are the five top things you need to know about what punters are tipping as 'Black Monday'.

5 Things You Need To Know About 'Black Monday'
Monday's crash was months in the making(01 of05)
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The downturn in China has been fueled by the country's currency devaluation a fortnight ago, long signs of a slow in economic growth, and a lack of confidence in industry figures' ability to stem the tide.

As of 9am Monday morning, more than $5 trillion had been wiped from global stock values in just two weeks. Asian markets suffered most harshly (Shanghai in China closed 8.5% down) while New York's DOW experienced its largest drop in a single day on Monday. (credit:MARK SCHIEFELBEIN/AP)
It's affecting Britain(02 of05)
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Both the UK and Europe have felt the tremors too. Around £44 billion was lost in the FTSE100 in just two hours of trading, rising to £56bn at 3:00pm, taking it to its lowest mark since 2013 -- that's on top of the £46 billion lost in total last Friday.



Mining companies have been hit hardest by the news, with Glencore, Anglo American and BHP Billiton trailing in the shares index, but no firm was exempt.

Every business floated on Britain's blue-chip stock list fell on Monday morning. (credit:RICHARD DREW/AP)
The downturn is important(03 of05)
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It matters to UK residents because of how huge China's dominance of the global money market has become. It is the world's second-largest economy (behind the US) accounting for 13.4% of global economic output - meaning any previous concerns about the knock-on effect of Greece's downturn (the country makes up just 0.3%), pail in comparison.

Audi, Jaguar Land Rover and BMW - all companies popular with consumers and who employ workers in the UK - have all slashed production forecasts or issued profit warnings in the last few months. Even Ford, a bastion of British automotive engineering, says it expects a decline of sales in China to fall for the first time since 1990.

"There is virtually no industry that it does not influence, nor any multinational that does not include Chinese land, labour or capital somewhere in its supply chain," The Spectator commented of China. (credit:STR via Getty Images)
Journalists are using overblown language(04 of05)
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Reporters are having to plunder their thesauruses for ever-more dramatic words to use to describe events in China. Phrases you should expect to see include: "A fog of fear" (Guardian), "malaise" (Al Jazeera), "meltdown" (CNBC), "bloodbath" (Telegraph) and "market mayhem" (Business Spectator). Brace yourself for more... (credit:Mark Schiefelbein/AP)
And some people haven't quite understood the matter(05 of05)
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Trust Twitter to fall-about laughing in a crisis... (credit:CHRISTOPHE ARCHAMBAULT/AFP/Getty Images)
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