We've discussed before how the Chinese government has attempted to, in so many words, 'take over' that country's stock markets and 'manage' the economic crisis affecting them - to no avail. The Economist sums up why those measures haven't worked.
Why is China finding it so hard to save its stockmarket?
The short answer is that, for all the government's involvement, China's stockmarket is still a market, and there are now more sellers than buyers ... Had China's stockmarket been allowed to crash, shares would have eventually found a floor. Instead, regulators have tried to erect a floor, and investors are not sure whether it really is the low point or just another artificial bottom susceptible to collapse.
The intervention has also created new problems. By wading in so heavily, the fate of stocks now sits in the hands of officials.
. . .
Even if the government does manage to withdraw its support without causing share prices to crash, the long-term damage to China's stockmarket will be severe. At the height of the sell-off, just over half of companies suspended their shares from trading, hoping to avoid the rout. Although most have now returned to the market, the message to investors is clear: if you put your money into risky stocks, you might find them frozen at a time of crisis, just when you need to cash out. What's more, regulators have halted initial public offerings, trying to limit the supply of shares and push up the prices of those already listed on the market. Past experience suggests it could be months before they lift the ban and let companies issue new shares. Add it all up, and China is left with a stockmarket in which investors take their cues from the government. Rather than bothering to assess the value of companies, they are betting on what regulators will do next.
There's more at the link. Bold, underlined text is my emphasis.
I think the last two sentences say it all. By intervening in a nominally 'free' market, the Chinese government has demonstrated conclusively that it isn't 'free' at all. That means people are no longer chasing profits. They're chasing government edicts, and taking bets with their investments on what the next edict will be. I imagine the potential for bribery among the officials responsible - "How much for a hint about your next decision? Please? Pretty please with dollars on it?" - must be on an absolutely epic scale . . .