Reuters
Gordon G. Chang, Daily Beast: How China Could Crash the Global Economy
Markets have paid too much attention to what the Chinese government says, and too little to what the economy is not doing.
“China has a major adjustment problem,” George Soros told a conference in Sri Lanka on Thursday. “I would say it amounts to a crisis. When I look at the financial markets, there is a serious challenge which reminds me of the crisis we had in 2008.”
Soros is wrong on one important count. The next global downturn, which looks like it is now beginning in China, will be worse than the one last decade.
Last week, China shook. Twice—Monday and Thursday—a just-installed “circuit breaker” mechanism, designed to limit volatility, caused Chinese stocks to crash. All of the market gains last year were wiped away in just four trading sessions. By Thursday, the widely followed Shanghai Composite Index lost 11.7 percent, while the Shenzhen Composite was off 15.2 percent. That meant the destruction of about $1.1 trillion in wealth.
WNU Editor: Gordon G. Chang has been predicting the end of the Chinese boom-economy for years .... but he may be correct this time. He he is also not alone in predicting dire times ahead .... The China Syndrome: The Coming Global Financial Meltdown (Zero Hedge).