Q&A about this week’s market turmoil in China and beyond

FILE - In this Tuesday, Aug. 25, 2015, file photo, Chinese investors monitor stock prices at a brokerage house in Beijing. Volatility in Chinese stocks roiled global markets this week, showing how big and closely-watched China's market has become - and reminding investors that stock markets can and do swing wildly. (AP Photo/Mark Schiefelbein, File) FILE - In this Tuesday, Aug. 25, 2015, file photo, Chinese investors monitor stock prices at a brokerage house in Beijing. Volatility in Chinese stocks roiled global markets this week, showing how big and closely-watched China's market has become - and reminding investors that stock markets can and do swing wildly. (AP Photo/Mark Schiefelbein, File)

By Associated Press August 28, 2015 4 min read

BEIJING (AP) – With the Chinese stock market turmoil that incited global panic abated – at least for now – here are some questions and answers about it, as well as lessons to learn:

___

WHY DID THE CHINESE STOCK MARKET PLUNGE SO MUCH?

China’s main stock index tumbled nearly 23 percent over five days before returning to positive territory Thursday and Friday.

It had more than doubled over 12 months from June 2014 as state media encouraged the public to invest even after economic growth began to slow. That fostered expectations the government would intervene if needed to keep the market from falling. By June, stocks were “trading at sky-high, rocket-crazy valuations,” said Dickie Wong, executive director of research at Kingston Financial Group in Hong Kong.