A Chinese investor looks at a stock price board.
A Chinese investor looks at a stock price board. - 
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Scott Jagow: Let's turn to our man in Asia, Scott Tong. He's in Shanghai. Scott, what specifically is dragging down the markets in Asia?

Scott Tong: The broader story is a similar one to what we're hearing in the United States. A lot of it is connected to energy prices -- car makers, Toyota, et cetera, they've taken quite a hit. So, you know, the world is pretty flat here, and they've got pretty similar worries to other markets in the world.

Jagow: Well, Toyota obviously has a big impact on the Japanese stock market. What about China's stock market? How is it doing right now?

Tong: Well, if a bear market is 20 percent, then Shanghai is down three bears . . .

Jagow: Wow.

Tong: Because the market is down 60 percent since last October. Right around then, you and I may have talked about PetroChina. There was an IPO last autumn, and PetroChina, when it issued these new shares, was suddenly declared a $1 trillion company -- the biggest in the world by market value. But what's happened to PetroChina? Down 62 percent. So China's down a lot worse than most other markets in the world.

Jagow: But I thought the sense was that China is kind of insulated because its economy is so red hot.

Tong: Well the predictions are still that China may grow 8 [percent] or 9 percent this year. However, the stock market doesn't always reflect the economy here. The stock market is relatively small, and it's heavy in retail investors -- a lot of people who are trading by themselves or at these brokerage houses. So momentum and how people are feeling about the stock market really play a big role in whether it goes up or down.

Jagow: Well Scott, how is the Chinese government responding to this huge drop in the stock market?

Tong: The Chinese government is really actively involved in the stock market. And this year, of course, is the Olympics, and a lot of investors were expecting Beijing to say, you know what, we're going to help the stock market, we're going to introduce some new policies to bring it back up. Well, guess what? It hasn't happened. The investor sentiment hasn't really picked up the way a lot of people expected it to. So as influential as Big Brother may be in China, even Beijing isn't able to stand these losses.

Jagow: All right, Scott Tong in Shanghai. Thank you.

Tong: OK, Scott. Nice to talk to you.

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Follow Scott Tong at @tongscott