China’s woes

Unless you have been binge watching Game of Thrones you have probably at least read about some of the negative events happening over in China.

In just under a decade Chinas economy has gone from up in the air into a global powerhouse. China’s Gross Domestic Product has grown 316% in the past decade versus the United States’ 43%, however its GDP per capita is 91st lowest in the world. China is also THE global hub for manufacturing as well as the largest exporter of goods in the world. Finally China is the world’s fastest growing consumer market.

Things began to get eerie when China’s up and coming economy’s growth started to slow down made worse by poor economic data such as wide set allegations of smoothing over data, consistently hitting economic target percentages to a tee and just plain signs of tampering (see China’s unclear data).

Over a three week spell through June-July the Shanghai stock market had fallen by 30%. By early July over 1400 companies had filed for a trading halt in order to prevent further losses, but despite government intervention (limiting short selling, preventing initial public offerings, providing brokers with cash) the Shanghai index fell on July 27 by 8.5% the biggest drop since 2007. Next was the highly questionable devaluation of the Yuan on August the 11th. A fortnight the global Financial market is attempting to rebound from another Black Monday.

However what the next few days and hopefully weeks will continue to show is Stock markets rebounding. The events of the past few days were always foreseeable with such a huge immature market such as Chinas, but most of the analyst weren’t predicting such a drop or were even doubting the occurrence of one at all. However recent effects aren’t the be all and end all and no this isn’t going to turn into the Global Financial Crisis of 2007.

Check back for further edits.


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