Catching a chill when the Chinese dragon blows cold
It has been a turbulent time on the international stock markets. The recent collapse of Chinese stock markets has roiled investors around the world. The collapse of Chinese stocks is not a surprise. What is surprising is why the Chinese authorities allowed such a massive bubble to develop during the previous 12 months when Chinese stock markets increased by a staggering 150pc.
During the recent recession, it was Chinese investment and growth that saved the world from a deep depression. While the rest of the world was stagnating, China continued to grow by an average rate of 10pc per annum, sucking imports from all over the world and growing its own share of world export markets.
China is now the second-largest economy in the world and contributes 15pc of world GDP and 25pc of all exports. The transformation of the Chinese economy and society during the last 35 years has been on a truly epic scale. The rate and pace of change in China in recent decades is unprecedented in human history.