Chinese Market is Slowing, Stop investing in Metals, Crude Oil, etc
Chinese market which was a booming market in 2008-09 is bearish right now as the Shanghai Composite Index has lost 20% of its chime, which's considered to be low in the past since 4 1/2 years. People Bank Of China consoled the investors, but the actual fact remain the same. People Bank Of China has increased the interest rate to 25%, which has send the red signal to all the investors. Now, buying money at this rate will not create more investments. The Chinese Government is curtailing the money in the market and will keep the tap closed. As the 25% interest rate will change the habit of the people, less spending and more saving.
Money market will be freezed. Apart from that the Chinese Government Management want the Banks to clear the bad debts at the earliest. When cheap money were pumping in 2008-09, lot of bad debts had been created, which in future will create run on the bank. Apart from that, badly run banks must be pointed out and restructured for the future of China. If China slows down, the whole of Asia will be coming down. Japanese market dipped 0.7%, South Korea down 2.7% and Australia were down by 0.3%. Mining industries were the hard-hit. Reduce liquidity in the market will hamper the growth of China. The Asset prices were to cool down, market prices of goods have to come down, export will come down and import will be higher, demand started to curb down. China had to do a lot more to keep the market moving. Otherwise it will became a atom bomb like Japanese market in 90's.
Money market will be freezed. Apart from that the Chinese Government Management want the Banks to clear the bad debts at the earliest. When cheap money were pumping in 2008-09, lot of bad debts had been created, which in future will create run on the bank. Apart from that, badly run banks must be pointed out and restructured for the future of China. If China slows down, the whole of Asia will be coming down. Japanese market dipped 0.7%, South Korea down 2.7% and Australia were down by 0.3%. Mining industries were the hard-hit. Reduce liquidity in the market will hamper the growth of China. The Asset prices were to cool down, market prices of goods have to come down, export will come down and import will be higher, demand started to curb down. China had to do a lot more to keep the market moving. Otherwise it will became a atom bomb like Japanese market in 90's.
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