Not since November 2014 has the Shanghai Composite Index, the primary benchmark of China's stock market, shown such weakness as it has this month. Late last week, the index gapped below its key 2,650 support level and has continued to drift mostly lower since, establishing nearly a four-year low in the process.
A combination of rising global interest rates, lower economic growth projections for China and growing U.S.-China trade disputes has contributed to weighing down Chinese stocks in recent weeks and months.
Since the massive rise in the Shanghai Composite to its June 2015 peak at 5,178, the index has dropped by just over 50% to 2,561 as of Wednesday's close. This year alone, the Chinese equities benchmark has dropped by more than 22%, falling well below its 200-day moving average.
Given that China's growth prospects have declined substantially and there appears to be no end in sight for U.S.-China trade conflicts, the breakdown and extended bear market in China stocks is likely poised to continue.