China is the world's second largest economy, closely behind the US. It should not be a surprise that the condition of its economy is being closely followed by economists and investors all over the world. Being a main force behind the global demand for different commodities, its “health” is closely linked to the proper functioning of financial markets and other world economies, including the US, EU or the Pacific region.
It is widely believed that the state of the stock market is a good indication of where the real economy of a given country will be heading in the upcoming six months. If that is true, then the recent events observed on the Chinese capital market should be worrying. This year only, main local stock index, SSE Composite Index lost more than 40% of its value calculated from its peak registered in June of 2015. That is more than a small crash. Will it have an impact on the local economy and as a result on other world markets?
Finance Magnates takes a closer look at the situation in China after the big crash. In order to cast more light on the future of the Chinese economy and its influence on world markets a research has been conducted, followed by a deep analysis of the main SSE Composite Index.
Its behavior was matched with the historical evolution of other world indices, such as Japanese Nikkei 225, from the period after its market crash. The results of the analysis were more than interesting.
Asides from that, Finance Magnates points out the history of structural changes which have taken place since China became a communist country up until today. What decisions were taken in the past in order to transform this undeveloped state economy into one of the leading markets of the globe? What conclusions are there to draw? Is it possible to discover a framework in which future changes in China will take place? Finance Magnates examines those questions and many more.
This article is an excerpt from an analysis published in the recent issue of the Finance Magnates Quarterly Industry Report. To get the full article and other research products, contact tals@financemagnates.com
