Shanghai Stock Exchange fell some 6.5 percent Wednesday, sending ripple across Europe and raising concerns that a fall in shares in China could launched another global equity market crisis.

European benchmark indices tumbled in early trading Wednesday in the wake of the fall in Shanghai with Stoxx 50 index down 0.8 percent by mid morning. Meanwhile, the Euro Stoxx 50, which includes leading stocks in the 13 member eurozone, was also trading down 0.9 percent.

While the benchmark FTSE 100 index in London and in Paris both fell 0.7 percent, Frankfurt's DAX index was down a more one percent.

Wednesday's falls were less than the dramatic plunge in global stock markets in February which were also sparked by a sudden sharp fall in Shanghai. The February 27th drop in Shanghai helped to shake investor confidence in the prospects for the Chinese economy. Wednesday’s drop in Shanghai followed a move by Beijing to take some of the heat out of the nation's fast-rising share market by tripling the tax on securities transactions. With the number of stock accounts exceeding 100 million for the first time this month, China is extremely worried about the vulnerability of their people to a sharp contraction in wealth. 

The World Bank this week raised its 2007 economic growth forecast for China to 10.4 percent from a previous projection of 9.6 percent.