Why is China’s economy slowing down? | World Finance
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World Finance looks at the build up to Black Monday and how concerned world markets should be moving forwards. For a full transcript visit: http://www.worldfinance.com/videos/why-is-chinas-economy-slowing-down For more World Finance videos go to http://www.worldfinance.com/videos/
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Chinese economy will have major correction thus stay out of Chinese market. Chinese stock markets are rigged where you can't short stocks, no options to hedge itself and people are afraid to sell stocks because you can end up in jail for protecting their investment. Their government is pumping up their stock market by putting more cash reserve into the market which isn't sustainable. Their banks are extended with bad loans and their investment is stretched oversea while world market is cooling down. Manipulating their currency will also cause damages to world currency system. Next 7 years, we will experience bear market but in China, you can't short stocks or hedge yourself with options thus they have to keep pumping their cash reserve which isn't sustainable. Their income is rising thus they are losing cheap labor for manufacturing to SE Asian countries with almost 700 million people. They also have serious environment problems with air and water which will cause major health problems. Even Chinese government officials said their data are not reliable with 7% growth which I don't think that figure is correct. Its more like 4% and will decrease in the future due to size of their economy. Last 30 years, China experienced hyper growth thus its about time that growth will slow down like in Japan and S Korea. It will need major shake up in Chinese economic system to sustain growth but it will be more like 3-5%. Countries rely on Chinese economy must diverse its economy and investment.
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