Market Shock Rattles China After US Strikes On Iran

This Monday, July 13, 2026, a flash crash wiped out 2.5 trillion yuan in 15 minutes at the Shanghai Stock Exchange, pushing Beijing to offload its US Treasury bonds to save the yuan. Triggered by US strikes in Iran, this stock market crisis exposes the systemic vulnerability of traditional markets to energy shocks.

In brief

• A flash crash wipes out 2.5 trillion yuan in market capitalization in just 15 minutes.
• The Shanghai and Shenzhen stock exchanges close sharply lower, weighed down by the collapse of the energy sector.
• US military strikes in Iran cause oil prices to skyrocket and threaten China’s energy security.
• To save its currency, China massively liquidates its US Treasury bonds, spreading panic to Western markets.

The Collapse of Chinese Stock Exchanges

This major stock market crash occurred Monday morning, horrifying investors worldwide, while Kiyosaki thinks that gold, silver, oil, and bitcoin will withstand the market crash. At the close of the session, official figures confirmed the magnitude of this spectacular drop through key indicators :

• Instant losses : over 2.5 trillion yuan in market capitalization completely evaporated from the markets of the Middle Kingdom in just fifteen minutes ;
• The Shanghai Composite : the benchmark index fell 2.06 % to close at 3,913.79 points by day’s end ;
• The Shenzhen Component : the situation was even more critical in Shenzhen, where the index recorded a massive drop of 3.48 %, finishing the session at 14,522.9 points.

To understand the nature of this crash, it is necessary to look at the sectoral origin of the losses in the Stock Exchange, which reveals a crisis deeply correlated with the vital infrastructures of the world’s second-largest economy. Energy sector companies suffered dizzying losses throughout the day. The case of Datang International Power Generation, one of the country’s main electricity producers, is particularly emblematic as its stock recorded one of the market’s sharpest declines with a violent drop of 9.94 %.

The sharp decline in this specific sector directly and immediately reflects investors’ concerns about the country’s future hydrocarbon supply. This sudden paralysis also occurs in a delicate domestic context, marked by a Chinese economy already weakened by years of slowed growth and significant difficulties in its real estate sector.

Beijing’s Response

Faced with the situation, the central government activated its contingency plan by instructing its major national refiners to maintain maximum fuel production to preserve its supply security. This strict directive implies heavy financial sacrifices for industrialists, forced to operate at full capacity despite reduced margins, solely to build strategic reserves.

The origin of this sudden destabilization is rooted thousands of kilometers from Shanghai, more precisely in the Middle East. US military strikes against targets in Iran indeed triggered an explosion on global markets, raising the specter of a prolonged blockage of the Strait of Hormuz, a strategic maritime route through which about one-fifth of the world’s oil transits. For China, which imports more than 70% of its crude oil, this situation represented a direct threat to its energy security, causing an immediate rise in global prices.

The Liquidation of Treasuries and International Contagion

To support the yuan amid the general panic of investors, Beijing immediately deployed its major monetary measures by initiating a massive liquidation of its US Treasury bonds. The on-chain data indicate that Chinese authorities are actively mobilizing their dollar reserves to stabilize their financial markets against capital flight.

The decision to sell US sovereign debt adds an explosive geopolitical dimension to the crisis, since this action is likely to raise interest rates in the United States and complicate the Federal Reserve’s monetary policy. Consequently, Western stock markets opened lower under the effect of this contagion.

This major crisis invites nuanced reflection on the outlook for global financial markets and alternative assets. On one hand, traditional investors suffer directly from the critical dependence of state economies on Gulf energy flows, turning every geopolitical escalation into an immediate liquidity risk. On the other hand, this massive sale of US Treasury bonds by Beijing could shake confidence in traditional reserve currencies and government bonds.

In this context of forced monetary reconfiguration, the trajectory of the bitcoin price and gold will be closely watched in the coming days. While panic initially pushes traders to liquidate all their assets for liquidity, bitcoin’s decentralized, scarce, and independent nature could attract capital in the medium term looking for protection against the volatility of fiat currencies and the arbitrary decisions of central banks.