In simple terms: What happened to the Chinese Economy?

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helpmekid
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In simple terms: What happened to the Chinese Economy?

Why has the US had a massive fall?

1) What happened to the Chinese Economy?
2) Why did it happen?
3) What is the Knock on effect?
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Rakas21
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(Original post by helpmekid)
In simple terms: What happened to the Chinese Economy?

Why has the US had a massive fall?

1) What happened to the Chinese Economy?
2) Why did it happen?
3) What is the Knock on effect?
The US economy is recording solid, moderate growth (you may mean the stock market).

So basically what's happened in short is that the US has withdrawn stimulus to prepare to raise rates and demand for Chinese exports has fallen because demand in the US and Europe is no longer artificially inflated. China's economy is now slowing (though it's service sector growth is solid) and the markets are crapping themselves because Chinese demand is what has been holding up commodities for some time (the US is also importing less oil too) and there's now a feedback whereby it's emerging market customers exporting commodities have hit the crapper and therefore also don't want to buy Chinese goods in sufficient quantities which in turn is slowing China.

Knock on effect for the west should bar the market overreaction be minimal (at least for service economies like the US and UK) however it does seem that investors have clearly not recovered mentally from the Great Recession and are now crapping themselves at the first sign of a problem, hence anything could happen.
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