Impact of global market turmoil
The gyrations felt in the world's markets had their roots in China, but Asia's giant was just shifting over to a new way of growing.
WHAT we are about to see is a major restructuring of the Chinese economy and the pattern of its trade. It will have enormous consequences for Asia, and within that continent, on South Asia. In a way, this is China's "pivot to Asia". The American version focused on military preparedness. The Chinese will place emphasis on economic links. The stage for this fundamental change was set into motion by the events last month.
Over a period of less than three weeks, there was unprecedented turmoil in the world's financial markets. On Aug 11, the Chinese central bank devalued its currency by 1.9 per cent against the United States dollar and followed it up with smaller adjustments in the next two days. On Aug 24, Dow Jones Industrials in the New York stock market fell by more than 1,000 points soon after the opening bell. The same day, the Shanghai market declined by 8.5 per cent.
China, undoubtedly, was the main reason for this turbulence. Trillions of dollars of value were wiped off the markets in the United States and other major financial centres, raising the question as to what to expect in the future.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Columns
‘Competition for talent’ a poor excuse to keep key executives’ pay under wraps
OCBC should put its properties into a Reit and distribute the trust’s units to shareholders
Why a stronger US dollar is dangerous
An overstimulated US economy is asking for trouble
Too many property agents? Cap commissions on home sales
Time to study broadening of private market access