In most countries the stock market and the economy move up and down together in a happy union, but in China they have often been distant relatives. That split is widening like never before, with the economy continuing to slow but the stock market taking off, all of which hints at deep dysfunction in the financial system.

Just three months ago the main Chinese stock market was dormant. Since then it has surged 30 per cent and has started to show signs of the manic trading that normally does not appear until a bull market has been gathering steam for years. On some days this month, the trading volumes on the stock exchanges in China have exceeded those of all the others in the world combined. Prices are swinging wildly, with some of them gaining 10 per cent then losing it all and more within minutes — often in the absence of any news about the company or the economy. Showing classic symptoms of a mania, Chinese investors are borrowing heavily to buy stocks and flipping them quickly. On average, they are holding them for barely two weeks, compared with four months in the US.

This is just the latest frenzy to hit China and its origins date back to 2008. After the global financial crisis hit, Beijing tried to sustain its growth rate by pouring record amounts of money into the economy. Since late 2008, China’s money supply has expanded from $7tn to $20tn, an increase larger than those seen in all other nations put together. There is now more money circulating in the country than in the far larger economy of the US. Yet all this easy money is, on one hand, failing to prevent the economic slowdown while, on the other, fuelling the stock market and widening the disconnect between the two.