The Chinese economy is a big part of the global economy these days. We have to be concerned about the recent slowdown that led to recent stock market crash there. China today is 12% of global GDP, and 18% of global manufacturing, its simply crazy to a slow down in China doesn’t affect the World Economy. General Motors sells more cars in China than the US. Apple sees China as its most promising market, Any slow down has an effect,. Recently the stock market in China collapsed by 30%. The Chinese government put in measures to immediately strengthen the market successfully, but doesn’t mean the economy isnt slow. It is!! Morgan Stanley said today, the Chinese economy is the biggest risk to the global economy, and a collapse would cause a worldwide recession. We need to keep an eye on China and Chinese economy. My personal opinion is that we have a slow period coming up. Commodities will fall in value, Brazil, Australia, Peru and other commodity driven economies will suffer. The good news is I believe its temporary and China will simulate domestic growth as will the Japanese and any short term issues will be quickly reversed. But does China matter, yes absolutely and we need to fully aware of the development of their economy.

Wall Street Journal

Nigel Green deVere Group blog