The effect of Chinese stock market gyrations on the real economy could be less than feared

The Shanghai Composite Index suffered its worst daily fall in eight years - nearly 8.5 percent - on July 27, which sent shockwaves through other markets around the world.

Values have since continued on a roller-coaster ride, and it is now the impact of this turbulence on the Chinese economy that is now causing the most concern.

With this degree of volatility, some ask whether the Chinese government will be able to maintain its target of about 7 percent growth this year

Certainly, if these falls had been experienced on many of the leading bourses around the world, economists would be expecting some consequent fall-off in economic performance.

This is because stock markets are often the main engine of market economies.

The market capitalization of China's two main exchanges, in Shanghai and Shenzhen, was 55.84 trillion yuan ($12.54 trillion; 8.27 trillion euros) at the close on July 24, nearly 88 percent of China's 63.64 trillion yuan GDP in 2014.

Yet the value of shares available for trading on the exchange was, by most estimates, just 35 percent of GDP compared to many international exchanges, where the shares traded exceed that of the host country's GDP.

Many of the listed companies in China are, in fact, state-owned enterprises with large government shareholdings - only 29 percent of the shares of China's biggest listed company, Industrial and Commercial Bank of China, are available for trade, according to Bloomberg Data.

Furthermore, just 8.5 percent of household assets (not including property) were invested in shares in China compared to 63 percent held in cash on deposit at the end of 2013, the latest available data, according to the People's Bank of China.

With 46 million new share accounts being opened in the second quarter of this year, most estimates suggest this figure may have doubled to 15 percent, but it still implies the wealth effects of any falls will have a marginal impact on domestic consumption and, therefore, the economy.

The recent turbulence in the stock market therefore may not have any dramatic effect on the wider economy.

Despite the recent upheaval, the market also remains substantially up from when it began to surge in the middle of last year.