Business News


Chinese shares slipped down again this morning, ahead of economic data pointing to a further slow down in worlds second largest economy.

For two weeks Chinese stock market is been rumbling down sending shock waves all round the globe from Sidney to Wall street in London, and the fears that the world economic crisis its not over yet.

The main Shanghai Composite dropped by nearly 9 per cent the lowest since 2007. China’s growth is the lowest for many years and is expected to fall further this year.

Monday fall has dashed the hopes that the Chinese markets have left the worst behind and turned the corner.

How China’s share fall affects the rest of the world?

China’s economic growth is slowing down and there are concerns that the transition to a slower rate of growth could be disruptive.

Until mid June China’s market was booming and the main Shanghai index doubled. It was part the result of share buying with borrowed money so when the market started to decline and authorities didn’t intervine shareholders had to sell investments to pay back debts, that

 

when the fall begun.image

 

photo bbc news

China being the second largest in the global economy it would inevitably affect the rest of the world. China is also the  second largest importer of goods and commercial services. Therefore many of good prices has fallen.

The fall of Chinese market has affected the neighbouring countries.

The Hong Kongs Hang Seng was in negative territory but managed to edge up at the end of trade by 0,3.per cent.

Japans bench mark Nikkei 225 1,3 per cent down.

In other hand US Federal Reserve and the bank of England been looking to bring an end to the near-zero interest rates and start raising interest rates but at this time of uncertainty it’s very likely it will be delayed.

In mean time BBC News is reporting: ” China has cut interest rates and so-called reserve ratios at banks making it easier for banks to lend.

Plainly the market falls have spooked Beijing that its 7 % growth target will be missed.”

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