What's behind China's stock market meltdown? - Counting the Cost
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For the second time in a week stocks have fallen on China's stock exchanges, causing an emergency shutdown and intensifying concerns about the health of the world's second largest economy. Trading was frozen on both the Shanghai and the Shenzhen stock exchanges on Monday and Thursday after stocks plunged by more than 7 percent. The drop, which is being linked to poor economic figures, tensions after North Korea's nuclear test and the spat between the Arab world and Iran, comes amid further data showing that China's economy is slowing down. But what is heightening fears is that markets have continued to fall despite government intervention. The feeze in trading, also known as a "circuit breaker" was introduced last summer after more than $3.2 trillion was wiped off China's markets in three weeks - an amount more than 10 times the size of the entire Greek economy. In theory the circuit breaker should curb volatility, but it seems this week's losses may have been triggered by a depreciation in the Chinese currency, the Yuan. Charles Horne, an economy portfolio manager with consultancy firm China Policy, joins Counting the Cost to discuss the currency devaluation and the general lack of confidence in the Chinese economy. Saudi-Iran and the coming 'Oil Wars' Relations between Saudi Arabia and its regional rival Iran have reached an all-time low after Riyadh severed diplomatic ties with Tehran. The escalation in tensions came just a few days after the kingdom controversially executed a prominent Shia cleric. Regional heavyweights, both countries hold one-quarter of the world's proven oil reserves, but have been battling over regional influence. Mamdouh Salameh, an international oil economist and a World Bank consultant on energy, joins the programme to discuss the Saudi-Iran crisis and whether oil could become the frontline in a new Cold War. Sri Lanka opens doors to foreign investors Twenty-five years after a brutal civil war, Sri Lanka is beginning to see a big increase in tourism numbers. In 2015, almost 1.8 million people came to the formerly troubled island, up nearly 18 percent on 2014. Elected a year ago, the government is now trying to turn Sri Lanka into a destination for foreign investors - the most important being foreigners. Individuals and companies will now be allowed to own Sri Lankan land. Anushka Wijesinha, the chief economist at the Ceylon Chamber of Commerce, joins the programme to discuss the new investment drive. - Subscribe to our channel: http://bit.ly/AJSubscribe - Follow us on Twitter: https://twitter.com/AJEnglish - Find us on Facebook: https://www.facebook.com/aljazeera - Check out our website: http://www.aljazeera.com/
Comments
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Like they when there is stampede for the exits only a few would get thru the doors alive.
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Free market is a recipe for economic disaster i.e. economy elites will manipulate the market to their gain and collapse a nation thru recession. Hence, it is better for China devalue the currency rather than being manipulate by the currency traders like George Soros that benefit only a few elites rather than the billions of people in entire nation like China
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Chinese occupation of Tibet, Inner Mongolia and Manchuria. As well as their goal of wanting Taiwan, South and South-East Asia. That's why China needs to fall.
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Chinese investors late last year saw that they could no longer expect to make quick profits from stockmarket trading, so they began to sell their stocks, and therefore stock prices fell: rather than hold on to shares in favour of dividends, they preferred to gamble for quick money, which requires a rising market, an expanding economy, which can only go so far. Exports are limited, no matter how low a controlling Governmental style, quite in contrast to the idea of a free market one, would allow profits to fall (further devaluing the share values, by limiting the very dividends that would encourage investors to adopt a longer term point of view). Basically, the strict control the Communist Party wants over the capital-based free trading a burgeoning middle class would desire stymies the growth of that very same class, which the Communist Party not only wants but must allow to exist and grow, or face peasant revolts larger than any Tiananmen Square could hold. In short, the Communist Party is facing extinction, and must let go of control; it is more than a matter of economy: it is a matter of cultural evolution (one which neither reverts to Chairman Mao nor Confucius for inspiration of behaviour, let alone determination of policy).
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