The index has now plummeted by more than 45% since hitting a record high in February. The slump comes after a series of crackdowns by Beijing on its technology and education industries. That pushed down the stock market value of private education firms in the US, Hong Kong and mainland China.

A stock market crash is caused by two things: a dramatic drop in stock prices and panic. Here’s how it works: Stocks are small shares of a company, and investors who buy them make a profit when the value of their stock goes up.

“It is absolutely time to invest, not just in the Chinese market at large, but the companies which will benefit,” Erdoes said. Even with that volatility, annualized returns in the MSCI China Index over the past two decades have been above 12%, outperforming the S&P 500.

Chinese stocks are recovering from a recent pummeling. Chinese stocks are recovering from their pummeling in recent months, but some strategists see this as an opportunity to sell the broader market, rather than buy. One reason: They see plenty of risks still in the near-term for Chinese equities.

Science and technology in China have developed rapidly during the 1990s to 2010s. China has made rapid advances in areas such as education, infrastructure, high-tech manufacturing, academic publishing, patents, and commercial applications and is now in some areas and by some measures a world leader.

Should you sell or hold your Chinese stocks? Chinese stocks will remain under pressure for the foreseeable future, so investors who can’t stomach the volatility should sell their shares and buy more promising growth stocks in other markets.

The 1973–1974 stock market crash caused a bear market between January 1973 and December 1974. The crash came after the collapse of the Bretton Woods system over the previous two years, with the associated ‘Nixon Shock’ and United States dollar devaluation under the Smithsonian Agreement.

In January 2016 the Chinese stock market experienced a steep sell-off and trading was halted on 4 and 7 January 2016 after the market fell 7%, the latter within 30 minutes of open. The market meltdown set off a global rout in early 2016.

Many economists believe that the Asian crisis was created not by market psychology or technology, but by policies that distorted incentives within the lender–borrower relationship.

On Monday, the Chinese financial magazine Caijing reported that the government had ordered the nation’s social security fund not to sell any stock in Chinese companies. On Wednesday, the government told state-owned companies and executives to buy stocks.

Yet China’s stock market isn’t as big, relative to the Chinese economy, as in developed countries, so the panic might not spread to the economy as a whole. The Shanghai Composite index fell 5.9 percent on Tuesday to 3,507. That’s down 32 percent from the June 12 high of 5,166.