China’s leaders are clearly freaked out about the stock market. Global investors need to wonder how nervous they should be, too.

A 30% fall in the stock market, after a 150% rise, shouldn’t necessarily spark such concern. So why is Beijing in panic mode? Most analysts figure the real economy, while slowing, isn’t collapsing. And the stock market plays a limited role in financing in China, while the percentage of households exposed to the market is less than 10%.

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