Stock investors of the world unite!

For the first time in modern China, capitalists have outnumbered Communists. More than 90 million Chinese now trade stocks, says China Securities Depository and Clearing Co. That compares with 87.8 million Communist Party members at the end of last year, the state-run Xinhua News Agency reported on June 29, two days before the 94th anniversary of the party's founding.

Red is good, green is bad Credit:Reuters

It's safe to assume this is not what Mao Zedong envisioned when he led the Communists to power in 1949, and it presents tricky challenges for President Xi Jinping. A record number of investors, more than the population of Germany, flocked to the sharemarket over the past year as the Shanghai Composite Index doubled. Now, the boom is at risk of turning into a bust after the benchmark tumbled more than 20 per cent from its June 12 peak through to Monday, leaving many retail investors bruised and undercutting China's already sluggish economy.

"As more people get burned, the government feels more pressure," said Ronald Wan, chief executive officer of Partners Capital International in Hong Kong. "A disorderly decline will affect stability in the Chinese economy."