I love it when people call this a correction, as if unsophisticated Chinese investors are unlike the rest of humanity and will behave perfectly rational when they see all the value the gained disappear in a couple of months.
Here's what will actually happen in the coming months, China will keep on intervening in the stock market causing it to stop falling (because selling will be impossible). Investors will see their money become valueless because it's held up in worthless Chinese stocks killing whatever trust they had in the Chinese government. Then China will reach a period of 10 to 30 years where its market will not grow (because of lack of trust in the Chinese government).
If Chinese investors can get hyped enough to drive up valuations to 3000 p/e then they can also have a market panic.
Here's what will actually happen in the coming months, China will keep on intervening in the stock market causing it to stop falling (because selling will be impossible). Investors will see their money become valueless because it's held up in worthless Chinese stocks killing whatever trust they had in the Chinese government. Then China will reach a period of 10 to 30 years where its market will not grow (because of lack of trust in the Chinese government).
If Chinese investors can get hyped enough to drive up valuations to 3000 p/e then they can also have a market panic.