World Closely Watching Beijing: Will China Face a Mega-Crash?

Sunday, August 23, 2015
By Paul Martin

The leadership in Beijing is trying to pursue a completely new strategy to prevent a crash. The IMF supports China because it plays a major role in the world economy. But it remains unclear whether China will be able to come out of the difficult economic situation, DWN wrote.

Business leaders, international economic organizations and many politicians have always had a positive perception of China due to its successful track record over past 30 years. The international community has literally assumed that the Chinese leadership can “walk on water,” DWN wrote.

However, as China continues to experience major stock market selloffs in the aftermath of the recent currency devaluation, questions have started to arise about its further economic growth and its ability to come out of the current slump.

With regard to the possible outcome, DWN suggests two scenarios. One of them predicts an economic crash that will have a major impact on other countries such as Brazil, the US and Russia. On the other hand, the country has a relatively small foreign debt and major foreign exchange reserves of around $3,500 billion, which means that the country still exerts much control in global trade.

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