Thursday, July 9, 2015

Why China should worry the World more than Greece

The market knew that Greece since last 3 years at least.
The market has factored Grexit already.
EC cannot solve all of Greece's problems and the market has factored that aspect in.
Greece is too small a nation to affect any one except itself  or at most some parts of Europe.

China is the second biggest economy in the world.
It is already slowing down.
Its growth rate has been slowing. When financial markets outstrip real markets, a bubble ensues. The bubble has now gone bust in China with over 25 % fall in the equity  market in nearly a month.
The second largest economy is a buyer of commodities and any regression in China will further decelerate commodity economies. Economies like Australia and Singapore are China influenced in a big way.  Buying slowdown will hurt several global locales. Oil, gold, copper. coal would all slow down.

The decline of Chinese stockmarkets which affects the common man investor has geo-political implications.

Without any risk or responsibility

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