China- The next 2008 waiting to happen?
Hey guys,
I am sure you all have seen the news recently about China and its debt situation. Currently, China's debt is approx $3 trillion.
"IPOs have been shut down, short-selling has been banned, more than 700 shares – about a quarter of the market – have been suspended from trading, and, oh yes, a government-backed fund is buying billions of dollars worth of stock" (Fortune).
So my question is that will this situation cause another global market crash? How will it affect the US market? And what steps should investors/businesses take to prevent another 2008 from this point on?
Just curious about the situation
I don't think there will be much contagion beyond China and HK equities. The on-shore rally was really driven mostly by retail speculation financed by margin lending which is unwinding now. The people getting hurt are the Chinese mom and pops and the Chinese govt's credibility.
What about companies that are dependent on China's manufacturing? The Auto companies in India took a hit today due to the news, not a big hit but still it had an impact.
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