A rout in Chinese stocks that Beijing is desperately trying to stem has deep political ramifications for the country's Communist party, analysts say.
Tumbling stocks add one more thing to the list of grievances among China's growing middle class that threatens to undermine the ruling Communist party, Charles Robertson, global chief economist at Renaissance Capital, said on CNBC's "Squawk Box Europe."
The benchmark Shanghai Composite stock index has tumbled almost 30 percent in the past month, triggering a slew of measures to prop up a market where the vast majority of investors are from China's middle classes.
"All non-oil exporting countries become democracies as they get richer and China is at that stage where I think it could be a democracy on a 5-10 year view," Robertson said.
"The Chinese people are unhappy with corruption, unhappy with pollution – all the sorts of issues that led Taiwan to become a democracy in the 1980s and early 90s. I think the Chinese authorities don't want another reason, even for a few million Chinese, to be disgruntled with the Communist party and out on the streets," he said, referring to the selloff.
The Chinese Securities regulator on Thursday banned shareholders from selling large stakes in listed firms, boosting the Shanghai Composite almost 6 percent and stemming the correction for now.