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Why Should We Worry about Economic Growth in China?

Date post:13-Apr-2017
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Why Should We Worry about Economic Growth in China?By www.TraderNewsAndReviews.com.

www.TraderNewsAndReviews.comWhat happened to the Chinese economic miracle?

www.TraderNewsAndReviews.comIn the land of managed capitalism all is not well as economic growth slows.

www.TraderNewsAndReviews.comWhy should we worry about economic growth in China?

www.TraderNewsAndReviews.comIt is one thing if the economy of a small country tanks.

www.TraderNewsAndReviews.comBut what if the second largest economy in the world heads crashes?

www.TraderNewsAndReviews.comWhat happened and how will trouble in China affect your investments?

www.TraderNewsAndReviews.comThe New York Times writes about how China fell off the miracle path.

www.TraderNewsAndReviews.comFor years now, Donald J. Trump has been sounding the alarm on China, calling it an economic bully that has been eating our lunch.

www.TraderNewsAndReviews.comThe crux of Mr. Trumps attack is that Beijing manipulates its currency to keep it cheap and give Chinese exports an unfair advantage.

www.TraderNewsAndReviews.comBut that narrative is so last decade. China is now a threat to the United States not because it is strong but because it is fragile.

www.TraderNewsAndReviews.comSince the 2008 financial crisis world trade has fallen sharply, national debts are up substantially and countries are going back to autocratic rule with self-destructive consequences.

www.TraderNewsAndReviews.comIn all of these categories China leads the pack.

www.TraderNewsAndReviews.comAdding to Chinas worries is the shrinkage of its working age population due to the one couple, one child policy.

www.TraderNewsAndReviews.comFor years Chinas economy grew at 10% or more and its purchase of raw materials from around the world was a boon for developing nations.

www.TraderNewsAndReviews.comChina claims that its growth is in the 6% range but many believe that 4% is closer.

www.TraderNewsAndReviews.comIn order to maintain growth China is running up its debt funding poorly thought out projects.

www.TraderNewsAndReviews.comThe end result is an acceleration of their debt which has hit 249% of its GDP.

www.TraderNewsAndReviews.comWhy again should we worry about economic growth in China?

www.TraderNewsAndReviews.comRisk to Global Markets

www.TraderNewsAndReviews.comInvestors Business Daily describes Chinas multi-trillion Yuan debt as scary.

www.TraderNewsAndReviews.comSlowing growth amid rapidly escalating debt has troublesome implications.

www.TraderNewsAndReviews.comMuch of the credit is going to unproductive uses and propping up bad debts.

www.TraderNewsAndReviews.comThe longer that continues, the bigger the eventual debt implosion may be.

www.TraderNewsAndReviews.comA China debt crisis would ripple through the global economy.

www.TraderNewsAndReviews.comCommodity producers that rely on China demand would buckle.

www.TraderNewsAndReviews.comGlobal financial markets would see a stampede away from emerging markets and risk generally, exacerbating the direct effects of a China hard landing.

www.TraderNewsAndReviews.comU.S. Treasuries, gold and other traditional safe havens may fare well, but not much else.

www.TraderNewsAndReviews.comChina is an old hand at covering up its problems and hiding the true facts.

www.TraderNewsAndReviews.comThe International Monetary Fund estimates that around 15.5% of commercial bank loans totaling $1.3 Trillion are at risk in China.

www.TraderNewsAndReviews.com15% to 19% of outstanding loans are nonperforming according to estimates from Hong Kong and this could go as high as 25% which is nearly twice the IMF estimate.

www.TraderNewsAndReviews.comSo, Why Should We Worry about Economic Growth in China?

www.TraderNewsAndReviews.comAs Chinese orders for raw materials fall off developing economies across the globe suffer.

www.TraderNewsAndReviews.comThey in turn will buy less from US exporters.

www.TraderNewsAndReviews.comIn fact, Reuters writes about underlying weakness in U.S. manufacturing.

www.TraderNewsAndReviews.comWhen no one offshore has any money and lots of debt no one buys U.S. products.

www.TraderNewsAndReviews.comChina could end up selling off all of its US treasuries in a last ditch effort to prop up the Yuan.

www.TraderNewsAndReviews.comAnd as a last result China could resort to military adventurism in an effort to drum up patriotic support back home as the economy tanks.

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