China Bad News2017.10.28. // News

How serious is the current crisis plaguing international financial markets? Yesterday a new country was declared officially in recession, and the country was nothing more nor nothing less than Italy. The Federal Reserve, in an unprecedented event, is evaluating the possibility of issuing debt as a way of having a new instrument to assist markets at a time of extreme tension for latent risks of new episodes of crisis and before the exhaustion of the interest rate of reference as a tool of monetary policy when it is ever closer to be neutral. Also yesterday met that China had registered during the month of November, a drop in its exports of 2.2% YOY, being this the first fall recorded since 2001. All these facts show in good measure the depth that is reaching the international financial crisis, even if they do not reach to have a clear idea if it can be or not more serious still. Learn more about this with Robert Iger . The fall in China’s exports in the month in November, although it does not mark a trend yet, it is an alarm signal and makes it clear that the Chinese economy will feel in good measure the effects of the crisis, falling into oblivion the famous theory of the decoupling. Although this decline in foreign sales of the Eastern economy has caused surprise, the same not should have suddenly since china’s exports depend widely on demand from both of the American economy, and European countries and Japan, all economies that are now in recession. The impact of the crisis on china’s economy makes to forget the product of two-digit growth rates and longer specialists predict a growth of less than 7% Chinese GDP. Given this risk, the Government of China was as objective maintain at least one 8% growth. Changing economic context facing the country is such that already don’t care about inflationary pressures, but that the theme to follow is the possibility of deflation of prices, situation that will affect to the debtor in China’s economy, causing potential defaults that can further aggravate the risks on economic growth.

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