The Real Financial Crisis Is In China

As the Eurozone talks and negotiations partly resume between Greece and the European Union, China's economy fails to ignite after its months-long slump. According to analysts, China is heading for a 1929 stock market crash. The worst part, they say, is that investors glue their sights on Greece and not in an area that could serve as a global sinkhole.

According to analysts, before the Greek crisis, every summer, a 30% fall in the Chinese stock market becomes big news for all investors. This includes government actions to stem investor panic. But with the Greek crisis taking the limelight, China's economy may fall, along with its banks.

China is showing symptoms of the 1929 Great Depression where the United States was enjoying a decade of frantic growth, extraordinary wealth and excess. To blame was extremely rapid credit growth, according to analysts. China's credit boom even surpasses the capability the "roaring 20s" had.

However, China's own roaring decade only lasts a year.

The Shanghai composite had lowered by nearly 30% upon opening on Wednesday. Many companies have suspended their stocks from trading to contain the situation. Analysts also see that investors are not willing to gamble with the Chinese government's capability to manage assets effectively.

China's ineffective method of creating one bubble after another will not prosper for its stock market, according to analysts.