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They have a knock-on effect to the rest of the economy, especially oil.
@JayAtl
In your opinion, what will happen to other economies if Chinese economy starts to slow down? It is the second biggest economy and currently a big market to many western companies.
Oil I accept, but others aren't so much. Besides, it is the policies of the govt which have more to do with shrinking exports than other factors. One example, recently (probably May) India's export fell more than 1.5% just due to some blockade on jewellery export. It took some time for govt to realize the problem and rectify it. Which is my original point, the supply chain is so small compared to other factors (ok, oil) that they have minimal impact on exports. Oil is exception, but it is a necessary evil, no alternative.
Sorry for not being so coherent, but I am sure you can understand what I mean.
@JayAtl
In your opinion, what will happen to other economies if Chinese economy starts to slow down? It is the second biggest economy and currently a big market to many western companies.
Good point. But China still has enough economic muscle to swallow the crisis if they cannot avert it.
Outflows from Chinese equity funds in early June were the highest since early 2008. Total credit in China’s financial system has reached epic proportions. The world has never seen such debt acceleration. It has increased eight-fold the past 10 years and is now 220% of GDP.
According to the government, Chinese firms will have to pay $1 trillion in interest this year. Therefore, corporate cash flow is primarily used for debt service, not for growth. When economic growth turns to contraction, the bankruptcy avalanche starts. And that is happening now. The largest China shipyard is already in severe financial trouble. It can’t borrow money, so the latest word is that it will sell bonds. Who will buy them?
I wasn't a believer in China collapse theory, but its gaining a lot of traction now.
Rule of thumb, if investors run somethings not right.
That's true. So you should ask why everyone is abandoning the Rupee, while China is getting record levels of FDI.
China June FDI rises at fastest pace in more than two years - Reuters
Shen Danyang, commerce ministry spokesman, said on Wednesday that FDI inflows reflect a gradual rebound in the first half of this year even though a single month's figure would not signal a recovery in foreign investment.
Even Indians themselves don't trust the Rupee, and would rather have Gold.
wow chinese members attacking the Indian member because he posted a thread against chinese economy which is published in forbes? nice dudes... carry on....
Hey @bandit, here is a question.
Why is it that all the Global credit ratings agencies are downgrading India to junk status? S&P, Moodys, etc.
S&P India Rating-
India (Republic of) (Unsolicited Ratings) BBB-
Moody's-
*India Baa3 Stable
Why are the global investors abandoning India and causing the Rupee to crash?
Surely it should be the other way around right? They should be downgrading China instead, and the investors should be leaving China.
Why aren't they doing that? Why is Chinese FDI soaring to record levels, and why has the Chinese Yuan been appreciating pretty much non-stop the whole past decade? Why are the Global credit ratings agencies rating us so far above India?
Why is Chinese FDI soaring to record levels
They should be downgrading China instead, and the investors should be leaving China.
Why aren't they doing that
Haven't you seen any other posts by JayAtl (or his alter-ego "Korean") before?
He is our resident Indian troll who posts 5-6 anti-China threads in one go, and then disappears, usually banned.