China’s Stock Crash Poised to Flip Over Global Finance
SputnikNews.com
11.07.2015
As mainland China’s financial situation worsens, the overall economic turmoil is threatening to flip over the fragile growth in nations most exposed to the Chinese risk, with the rest to follow into a global meltdown, far exceeding in scale the Great Depression.
Kristian Rouz — The dramatic decline in mainland China’s bourses, which began on June 12 and received only limited episodes of government-backed relief, has had significant spillovers for the overseas markets, in both advanced and developing nations. Whilst the capital flight for the safer assets and decline in commodities’ prices are only the tip of the iceberg, the increased scale of fluctuations in global financials and major shifts in international trading in money and goods have all stirred deeper and longer-lasting effects in the world economy. Albeit the government in Beijing is attempting to stabilize the situation by having introduced monetary stimulus, the Chinese stock panic is threatening to throw a large part of modern civilization into a full-blown economic demise, in a fashion similar to the Great Depression of the 1930s.
The fallout in mainland China’s stock market started on June 12, and has led to a dramatic selloff in stocks across the sectors listed on the major indices of Shanghai and Shenzhen. Almost a month after the demise started, mainland’s stock markets have witnessed the equivalent of $3.9 trln of wealth vanish in what has become the greatest financial meltdown in China’s recent history. Among the biggest losers have been, besides the banking sector and the real estate, some 90 mln Chinese individuals, participating in stocks trading and comprising some 85% of all mainland investors.
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