Global Crisis Made in China
Economic carelessness of the Chinese government to clip the wings of the local economy Economic carelessness of the Chinese government to clip the wings of the local economy Trouble in the Chinese stock market has started the negative processes in the real China's economy, so - all over the world The global economy's great shakes. The crisis triggered by the collapse of quotations Chinese stock market has led to a serious (five percent) subsidence exchange indexes worldwide and their subsequent growth to the previous values. Tides feverish optimism contributed to the decision to reduce the financial authorities of the PRC main bank rates (it cheaper loans) and reduce banks' reserve requirements (This will release additional funds for lending). These combined measures poured into China's economy a lot of money, which, according to experts, will allow it to restore stable growth, pulling the whole world. That is why traders cook was for the next day sales, cheered by starting to buy sold out the day before the shares, bonds and other securities. However, their joy it may well be short-lived as the fundamental problems that led to the Chinese stock market crash, have not gone away. The Chinese economy, which demonstrated during the last decade amazing for all World growth, all the while not quite fit the concept of the "free market" because the degree of influence of the state and the corporations belonging to it was significantly higher than the Western democracies or even countries like Japan and South Korea. From this number "Distortions" in the economy. The government is so hard stimulated the development of infrastructure and capital construction, that at some point, housing in China has reached unimaginable 15 percent of GDP, began to turn into a classic "Bubble". Simultaneously with the construction volumes grew enormous pace and Chinese debt. AT In 2014 the total debt of the government, financial institutions, corporations and households reached 283 percent of GDP - more than $ 25 trillion. Much of this debt has been associated with an investment in the construction, although Many houses and apartments because of the constantly rising prices remained empty: people simply there was no money to buy them. But in 2014, the funds began to appear. The government of the PRC as easy as possible Sunset on the stock markets in small countries investors who wish to invest in securities. Exchange money flooded privateers the result was an unprecedented spurt in share prices. They went up the pace, more than 150 percent a year, those get rich Chinese who first engaged in stock trade. The company, whose finances are in far from ideal state, decided to improve the situation by means of going public. And many have succeeded: tens of millions of Chinese pledged their property, took out loans and buying up all the shares in a row, hoping soon to recapture the money at a huge profit, because the action did not stop more expensive. In the eyes of economists all over the world in addition to the construction began to grow more and the stock Chinese bubble. However, Beijing did not respond to the warnings: to increase the demand for accommodations he needed to let people make money on the stock exchange. In fact, one bubble power going to eliminate with the help of the other. This mad race was one of the factors slowdown in the real economy: people sent money (both own and loan) is not for the purchase of goods and services and investment. Because of the ensuing stagnant domestic demand, business at manufacturers have gone even worse than before. At the stock exchange in Shenchzhene the average value of the company / its revenue reached 70: 1. To By comparison, the same ratio on the New York Stock Exchange - 16: 1. Chinese stock market proved disastrously overheated bubble burst was inevitable. The first signs of the coming collapse appeared in mid-June, when the growth of quotations first stopped, and then within two months continued to fall on the "cascade" path: a sharp collapse, stabilization, the new sharp collapse. During this time, the index Shanghai stock exchange fell by 40 percent - to the values ​​of the end of 2014. In the world of this process is viewed with great concern, but not panic yet. It started when Once, almost 10 per cent failure on Chinese stock exchanges coincided with the decision PBOC devalue the yuan by two percent. On the one hand, this initiative is clear: NSC decided that with this step, the engine will be able to support China's economy - exporters who benefit on exchange and will be able to increase sales of their products. However, all did not work out as planned. Export revive failed because of problems with foreign importers: the Japanese economy gradually decreases, the euro barely showing signs of growth, the US is also located not in great shape. Countries heavily dependent on raw material exports (Australia, Brazil, Russia, South Africa), with money in the last few months really bad, because the raw material is much cheaper. Thus, the devaluation of the RMB is not spurred exports, but in one fell swoop sharply increased the debts of individuals and companies who took loans in dollars. Since the aggregate their debts already been enormous, and future profits - a big question, stroke I went on to the sore spot. In China, real panic began. And turmoil in the stock market - it's not so bad. They are, in general, be solved. Where seriously they will be reflected in the real economy. Dozens, if not hundreds of millions Chinese - budding in this country, the middle class - because of the market crash left without their savings, but with "junk" stocks and huge debts. The fact that these people will begin to invest in real estate, speech does not go - they will have to think about how to make ends meet, while paying debts. Their mass impoverishment together with the impact of the overheated construction industry (remember, 15 per cent of GDP) It will result in at least a headache for the banks, which were distributed in a growing market loans left and right. Not all the money will return, but the banks themselves pay off foreign creditors will have. In these conditions it is quite probable bankruptcy of many financial institutions. Zeroed on the stock exchanges of "the real" face big problems when obtaining loans for the development and / or maintain their livelihoods. The first signals incipient recession is already fixed. Compared with June, July exports from China It fell as much as 8 percent. Car sales in the country fell to the 6 per cent compared with the same period last year. And this statistic does not account for more catastrophic August. Here the numbers are likely to be even less fun. This decline in business (especially manufacturing) activity in China will entail huge problems for suppliers of raw materials around the world that simply lose the market. China's economy - the second in the world - the last few years has been the engine of global economic growth. Her troubles would mean a global decline of almost all goods and services. None of the Chinese middle class, in particular, the European producers suffer expensive and prestigious products for which the Celestial Empire has become one of the main, most dynamic markets. There is still a lot less tangible risks for the Chinese and global economies, stemming from one another. And many of them are not speculative, but quite objective character, throw them in the trash is not so easy. And here Tuesday's growth of stock indices around the world, in contrast, can only be short-term rally caused a good news from China. The billionaire Rupert Murdoch, a well-known fact that he knows everything about everyone, has suggested that since the fall, not only stocks, but global prices for basic goods and services, crisis may come very soon turn out to be protracted. At the same time, he said, if the will the global recession, then the world will not be effective tools for it overcome



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