Having invested in China's stock market for more than a third of his life, Zhou Jinli had plenty of experience with the cycle of boom and bust. But a recent crash that wiped out two-thirds of Zhou's retirement funds told him he hadn't seen it all.
"This is the worst I've ever seen," said Zhou, 63. "I hope the government will get to the bottom of this."
Zhou, a retired foreign ministry official with a crown of snowy white hair, said he had put more than $32,000 of his savings into the market. On Tuesday, he was outside the China Securities Regulatory Commission, the equivalent of the U.S. Securities and Exchange Commission, to lend moral support to a trio of demonstrators. Like them, he believes the government should exercise more oversight to keep the stock market in check.
The Shanghai Stock Exchange Composite Index, mainland China's main stock index, reached the height of a vertiginous climb – a 63% gain in four months – in mid-June. Since then, it has been on a downward spiral, declining 20% so far and sending alarms through China's growing ranks of investors.
Since China's stock markets, except for one in Hong Kong, are largely closed to international investors (about 2% of Chinese shares are foreign owned), the contagion effect is expected to be minimal.
In early June, days before the decline began, the U.S.-based stock index MSCI decided not to include some of mainland China's stronger stocks in its Emerging Markets Index.
However, unlike in some other economies, China's shares are mostly in the hands of individual investors, and market woes reach a broad swath of the country's best-educated and affluent people.
"They're well-to-do and are extremely vocal," said Wang Tao, chief China economist at UBS Securities in Hong Kong. "If they're unhappy, the government may be concerned."
For many Chinese, the stock market is one of the few freely available investment channels. Foreign exchange is strictly controlled. In most cities, the government puts a limit on home purchases in an effort to curb soaring property prices.
The Shanghai Stock Exchange started trading in 1990, followed a year later by the Shenzhen Stock Exchange, which offers high-tech start-up stocks. Taken together, their combined capitalization would make them the world's third largest market, behind the New York Stock Exchange and NASDAQ.
A recent survey by the state-run New China News Agency shows that more than 30% of college students own shares in the stock market.
Unlike Zhou, who started buying stocks in 1993, many of the stockholders are newcomers who jumped on the bandwagon in recent months.
In May, 12 million new stock market accounts were opened, bringing the total to 90 million in mainland China.
Adam Bai is one such newcomer. In late May, the graduate student in software engineering decided to plow $650 from the income he earned as an intern into three mutual funds, deeming them less risky than stocks. After some gains in his first two weeks, he doubled his capital. Now his investment is down 20% from its peak, tracking the market.
"I do want to see my money back," said Bai. "I believe in my government, and I still believe in the market."
Over the past week, government officers have pulled out all the stops to stabilize the market. They slashed the interest rate, curbed initial stock offerings and corralled major brokerages into pumping in more capital.
State media has been entreating everyone, from housewives to top executives, to buy shares. Meanwhile, rumors keep flying about market manipulation.
"The crash points to the need to strengthen regulation and supervision and the lack of transparency," said Wang, the UBS economist.
Meanwhile, Zhou said he could nothing but wait out the worst bust in his life as an investor, buoyed only with faith that more effective government intervention would be coming. He warned that turmoil won't be confined to the stock indexes for long.
"If the government doesn't do more about this situation, this could touch off a financial crisis and social instability," Zhou said.