CHINA SLUMP

PRESENT BY
ROHIT NILAWAR
SNEHA ARAKH
ANKUR SINGH

WHAT HAPPENED IN CHINA ?

Hundreds

of Chinese companies have suspended dealings

in their shares in a bid to arrest a frenzy of selling.

Chines

growth would fall to 6.8 % in 2015 & 6.3 % in

2016
About

1,300 companies have suspended their shares

almost half the market

Stock

markets in China are tumbling.

REASON OF CHINA
SLUMP

China is such a large buyer of industrial commodities that

the possibility of lower-than-expected sales to the country has
also undermined the prices of copper and aluminium
safe heaven effects in thee market
In the currency markets, the most likely candidates are the
yen and the Swiss franc.
The dollar could also be affected, though the US currency
already has a strong tailwind from the Federal Reserve's
interest rate policy.
The Fed started to raise rates last month and that has been
encouraging investors to buy dollars.

CHINESES AUTHORITY
SHOULD DO
they

could relax the rules on bank

lending or they could increase
spending
They could also encourage the currency, the
yuan, to fall further to stimulate exports.
cut down the lending money
more specifically targeted on the stock market.
They have extended restrictions on large
investors selling shares.
Cut

down the interest rates

EFFECTS ON CHINESE PEOPLE

Those

who have borrowed money to buy shares in the last year have
already been hit very hard.

most

people don't own shares - only one person in 30 does, according

to Capital Economics.

Chinese

the wider issue is about the health of the country's economy.

it

is likely to still be fast enough to generate rising living standards for

most people.

A more

disruptive slowdown would mean many business failures and

job losses.

There

is not enough foreign investment in the Chinese market for it to be a

major problem
foreigners OWN JUST 2% percent of share
The

issue is more about whether the financial turbulence shines a light on

wider issues about the economic slowdown in China: is the economy heading
for what's called a "hard landing", too sharp a slowdown?

It

is the second largest economy and the second largest importer of both
goods and commercial services.

A crisis

there would be serious for the rest of the world, particularly countries
and firms that export to China.

Chinese stock market crash

impact Indian markets and the
rest of the world
Commoditi

es
Automobile
producer
Oil
Indian
exports

CHINAS CONDITION
Beijing reported that China's giant manufacturing sector contracted at the
fastest pace in three years. A separate private survey of smaller firms showed
the factories slowing to the weakest pace in more than six years.
the slowdown is hitting China's biggest suppliers and major trade partners
hardest. In August, exports from South Korea tumbled by nearly 15 percent
the most in six year
For U.S. exporters, China represents the third-largest marketbehind Canada
and Mexicoaccounting for $120 billion worth of goods last year.
trade represents only 7 percent of U.S. exportsor less than 1 percent of
total gross domestic product, according to economists at Wells Fargo
Securities.

Washington, which sold roughly 20 percent of its exports to China last

year, or nearly $10 billion worth of goods. Airplanes, the state's largest
export by far, made up the bulk of the state's sales to China.

California exported some $16 billion to mainland China last year, with
computers and electronics accounting for nearly 28 percent of the total.

Texas was the third-largest exporter to China, with nearly $11 billion
worth of products that included chemicals, computers and machinery

Alaska, which exports a smaller volume of goods, last year sent a bigger
sharesome 28 percentto China. Roughly half of Alaska's $1.5 billion
in exports to China last year consisted of seafood.

U.S. farm states are also big exporters to China, which is the biggest for
American agricultural products. Some 20 percent of all U.S. farm exports
are sold to China

IMPACT IN INDIA

 29%

China is the largest contributor to Indias

total steel imports
. The yuan devaluation makes steel imports to
India cheaper.
Larger steel manufacturers have taken a hit on
profitability to cut prices and retain market
share.
China has been steadily increasing its share of
Indias tyre market