China stock probes send shivers through investment community

Investigations by Chinese authorities into wild stock market swings are spreading fear among China-based investors, with some unsure if they are simply helping with inquiries or actually under suspicion, executives in the financial community said.

Chinese fund managers say they have come under increasing pressure from Beijing as authorities’ attempts to revive the country’s stock markets hit headwinds, with some investors now being called in to explain trading strategies to regulators every two weeks. Ironically, the impact may be the opposite of what is intended. By frightening fund managers, Beijing risks accelerating the market selloff and puts other wider policy goals, including the increased use of the yuan abroad, at risk.