China bumbles, markets tumble, while free market reigns

Much like China's infamous empty cities, the country's perfectly constructed economic statistics obscure the truth of what lies behind them. While U.S. and international companies certainly were selling real product to the richest of China's 1.4 billion consumers as well as to other parts of the emerging world signs of a slowdown were lurking behind the well-manicured walls.

These indicators were years in the making. It didn't help matters that China appeared to believe its own press regarding its omnipotence. Like a moth to a flame, the People's Bank of China couldn't resist toying with Adam Smith's free market, easing into a more market determined exchange rate for its yuan. Surely 250 years of American free-market history was no match for the Chinese central-planning machine, as encapsulated by the now pejorative term "state capitalism"? But having left ajar the door to free-market capitalism, China was defenseless against its onslaught.

The unrest was punctuated by the most significant downward yuan adjustment in 20 years before spreading into already-struggling equity markets to finish off like Smith's "invisible hand" what remained of 60% year-to date gains.

"Chinese policymakers have tried everything under the sun to mitigate the selloff rate reductions, stock purchases by state-backed funds, new liquidity measures to no avail. It is ugly for now, but what we are witnessing is "normalization"; i.e., letting the free market reign", says Voya Global.