Chinese mainland stock markets tumbled again on Tuesday, with the benchmark Shanghai Composite Index diving by 7.63 percent to close at 2,964.97 points, having on Monday posted the biggest one-day loss in eight years.

Some critics blamed China for causing a ripple effect in international markets, with Asian stocks and global commodities also nose-diving in recent days. Some even predicted a new financial crisis was looming. But as far as I'm concerned, the fundamentals of the economy in China and the world's economy do not suggest the current turbulence in China's bourses will snowball into a financial crisis.   

First, the downward trend in the Chinese stock market will eventually be reversed when investors regain confidence, and the government has enough tools to keep the market from having a significant impact on the real economy or sparking a financial crisis. For instance, on Tuesday the China Financial Futures Exchange announced new rules for stock index futures to curb excessive speculation and reduce market volatility.

Second, a short-term stock market slump does not necessarily mean a financial disaster is impending, and the current turbulence is quite different from previous global financial crises. The prerequisites for a real financial crisis are still absent and a replay of the Asian financial crisis of 1997 seems unlikely.

During that crisis, some major Asian currencies were attacked by international speculators and the value of the Thai baht fell significantly, but the fixed-exchange-rate system that triggered the crisis has been replaced by more sound floating-rate regimes in most Asian countries. And although the current Chinese stock market slump followed a devaluation of the yuan nearly two weeks ago, the weakening of the yuan was caused by market-oriented exchange rate reform, rather than a hostile attack from the global market, and the currency has stabilized since August 14.

Meanwhile, a 2008-style financial crisis also seems unlikely. The stock market accounts for less of people's wealth than the real estate market, which is showing signs of recovery. The global financial crisis of 2008 was triggered by a property market slump and a fragile banking system, but the current circumstances are different, and the mainland market slump has had a limited impact on the real economy and the country's financial market.

Third, there are complex reasons why Asian stocks and global commodities have fallen in recent days, and it is unreasonable to attribute their decline only to the Chinese stock market slide. According to the Xinhua News Agency, French Ecology Minister Segolene Royal on Tuesday said the influence of the sharp sell-off in Chinese stocks was "limited" because "China remains an extremely dynamic country." Besides, most Asian stock markets saw a recovery on Tuesday.

Moreover, after China's central bank announced on Tuesday evening that it would cut interest rates and banks' reserve requirement ratio, some analysts and investors forecast a possible rebound in mainland share prices in the next few days. 

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn