Will China bring down the western economies?

BobQ

So could China destabilise the western economies in the way suggested?

Ironic that the communist world now has the potential to cause such damage to the capitalist economies.

http://www.telegraph.co.uk/finance/11805523/Doomsday-clock-for-global-market-crash-strikes-one-minute-to-midnight-as-central-banks-lose-control.html

Loughton_Monkey

China may be a communist country, but it is a capitalist economy.

Any economic downturn, and/or action by such a large economy is bound to have some effect on global markets. Look what Greece can do all on its little lonesome!

But to think that in any way this is a deliberate and/or concerted effort aimed purely at firing a big hole in US and European markets is pie in the sky. There would never have been such an example of shooting one's own foot in the history of the world. I am not denying that there are scenarios in which this is signalling a 2008-style global crash. But (a) I don't think it is, and (b) China is not stupid and will try to stabilise things a bit after a bit more contemplating of the navel. Who thinks they don't understand that the economic prosperity of US, EU et al is vital to their own success?

What we have here is a 'simple' case of China's growth levelling off. Energy and commodity prices are suffering as a result. They do not like failing their 7% growth target since it loses 'face'. A few cosmetic actions, a few weasel words, perhaps finding a way to convince all the Chinese that it's the fault of US, and things will settle down, albeit at marginally lower levels.

I'm not selling yet.

kabayiri

I've given up on trying to make any sense out of this global economic situation.

It seems only a decade ago that Gordon Brown was using PFI to keep debt within the Golden Rule. Spending 20 billion more than income in UK seemed to unnerve people.

After the GFC, nobody really blinks if another 100bn goes on the national debt. After a while, 1,500 billion blurs into 1,600 billion. What's the difference?

The Americans talk in terms of trillions in debt, in a vain attempt to laugh at our hundreds of billions!

All you can do is focus on the small stuff; food in the cupboard and a roof to keep you dry. Look after the pennies, the billions will look after themselves

chewmylegoff

Buy silver.

Generali

BobQ wrote: »

So could China destabilise the western economies in the way suggested?

Ironic that the communist world now has the potential to cause such damage to the capitalist economies.

http://www.telegraph.co.uk/finance/11805523/Doomsday-clock-for-global-market-crash-strikes-one-minute-to-midnight-as-central-banks-lose-control.html

It could but it probably won't.

All that has happened is that the Chinese are slowly moving towards a system of floating exchange rates just like.....every other major economy in the world!

As the ERM debacle taught the UK and the Euro SNAFU is teaching the Greeks and others, fixed exchange rates are, in general, a very poor idea.

A. Storm. In. A. Teacup.

Thrugelmir

Loughton_Monkey wrote: »

What we have here is a 'simple' case of China's growth levelling off. Energy and commodity prices are suffering as a result. They do not like failing their 7% growth target since it loses 'face'.

More likely the truth is that the economy has been stalling for some time. The published stats are at best unreliable. Stock market manipulation in order to float off state owned companies shows the extent to which the markets are influenced.

Thrugelmir

Generali wrote: »

y won't.

All that has happened is that the Chinese are slowly moving towards a system of floating exchange rates just like.....every other major economy in the world!

Thought that recent devaluation was to support falling exports.

purch

Looking at China's expansionist policies in the South China Sea and elsewhere, it will probably bring down the Western world, but not via the financial matrkets :eek:

imin83

So in what way do you suggest China will bring down the western world? From my POV, China is only good at producing low-priced stuffs.. not sure though those will be able to bring down any civilization

DiggerUK

The effect of China on the global stage may show itself in a destabilisation of U.S.Bonds.
For now that seems to be contained; inasmuch that U.S.Bonds being sold by China seem to have ready buyers.

If countries begin to drop their pegs to the U.S. Dollar however......then who knows.

http://www.bloomberg.com/news/articles/2015-08-09/china-slashes-u-s-debt-stake-by-180-billion-and-bonds-shrug

http://www.bloomberg.com/news/articles/2015-08-20/kazakhstan-scraps-currency-trading-band-moves-to-free-float

http://www.investopedia.com/articles/forex/061015/top-exchange-rates-pegged-us-dollar.asp

[Deleted User]

imin83 wrote: »

So in what way do you suggest China will bring down the western world? From my POV, China is only good at producing low-priced stuffs.. not sure though those will be able to bring down any civilization

look not just at what they produce but also what they own outside china