Chinese stocks in the mainland and Hong Kong markets cratered last week, wiping out US$1.2 trillion in market value along the way in July, as regulatory clampdowns struck fears into free-market believers.The slump, the biggest shakeout in more than five years, handed investors a reminder about a market built on “Confucian hardware and Soviet software” as described by hedge fund giant Bridgewater Associates. Its founder Ray Dalio, a China optimist, told sceptics not to be scared by the latest…