The days when one country’s economic woes could be insulated from the wider world have long gone. China’s problems could have a fearsome domino effectAnother day,another financial spasm. In London, original York, and Shanghai and Frankfurt the story was the same. Shares dumped and the oil price crashing to its lowest level since 2003 on fears that the China is heading into a recession that will drag the rest of the world economy down with it.
Despite the fresh sell-off in financial markets on Wednesday,this is far from a done deal. For the doomsday scenario to materialise, China would need to have a tough landing, and rather than simply a bumpy one,the rest of the world would have to be ripe for its own crisis, and there would need to be a transmission mechanism for delivering a problem centred on east Asia to the rest of the global economy.Continue reading...
Source: theguardian.com