A stock market bubble was a major cause of the 2015-2016 financial trouble in China, but one that is largely seen as necessary to burst and normal for a young economy. This bubble was inflated due to changes in trading regulations allowing margin trading, and an encouragement of investors purchasing stock using borrowed money. In addition the Chinese Purchasing Managers’ Index, a measure of national manufacturing activity, fell in 2015 indicating a slowing in Chinese manufacturing prompting a selling frenzy in 2016. However the Chinese economy remains one that is hard to read and divergent from the stock exchange, making financial bubbles more likely but less indicative of real economic disaster. China recent sheepish growth forecasts demonstrates the government's dedication to address these issues, as China transitions toward a more service based economy.
The current trade war on the other hand has been spurred on by a multitude of factors; China’s long term strategy for making the Renminbi a major world reserve currency, China’s turnaround from 25 years of an economic surplus to running a deficit, and China’s transition to a consumption-led economy. Meanwhile these issues are complicated further by various geopolitical standoffs involving the US, China, Turkey/Syria/Russia, India/Pakistan, and Hong Kong especially, putting China in the difficult position of possible military action in one of its special economic zones. US accusations of China manipulating its currency, despite a lack of evidence and a contrary statement by the IMF, have meanwhile added fuel to this growing bonfire of tensions. As China is likely trying to wait out Trump’s presidency some have labelled this as China/US financial game of “chicken”, but while there are many factors that have influenced this trade war, the 2015-6 Chinese stock market turbulence was not one of them.