INSUBCONTINENT EXCLUSIVE:
sounding alarm bells across the world
Caterpillar Inc says Chinese demand for machines used on building sites is worse than previously thought.US President JoeBiden called the
the selling in blue chips
Goldman Sachs Group Inc and Morgan Stanley have cut their targets for Chinese equities, with the former also warning of spillover risks to
the rest of the region.Asian economies are taking the biggest hit to their trade so far, along with countries in Africa
Japan reported its first drop in exports in more than two years in July after China cut back on purchases of cars and chips
in China will hurt, rather than help, the rest of the world
global strategist BCA Research Inc, said in an interview on Bloomberg TV
slumpMany countries, especially those in Asia, count China as their biggest export market for everything from electronic parts and food to
metals and energy.The value of Chinese imports has fallen for nine of the last 10 months as demand retreats from the record highs set during
The value of shipments from Africa, Asia and North America were all lower in July than they were a year ago.Africa and Asia have been the
hardest hit, with the value of imports down more than 14% in the first seven months this year
Part of that is due to a drop in demand for electronics parts from South Korea and Taiwan, while falling prices of commodities such as
fossil fuels are also hitting the value of goods shipped to China.So far, the actual volume of commodities such as iron or copper ore sent
But if the slowdown continues, shipments could be impacted, which would affect miners in Australia, South America and elsewhere around the
world.Deflation pressureProducer prices in China have contracted for the past 10 months, meaning the cost of goods being shipped from the
The price of Chinese goods at US docks has fallen every month this year and that is likely to continue until factory prices in China return
Economists at Wells Fargo - Co
for US consumer inflation in 2025 by 0.7 percentage points to 1.4%.Chinese consumers are spending more on services, like travel and tourism,
expensive to travel than it was before the pandemic.The pandemic and weak economy have curbed incomes in China, while the years-long housing
market slump means homeowners feel less wealthy than before
That suggests it may take a long time for overseas travel to rebound to the levels they were at before the pandemic, hitting
against the dollar this year, with the yuan close to breaching the 7.3 mark this month
The central bank has escalated its defense of the yuan through various measures including its daily currency fixings.The depreciation in the
offshore yuan is having a greater impact on its peers in Asia, Latin America and the Central and Eastern Europe bloc, Bloomberg data show,
with the correlation of the Chinese currency to some others rising.The weak sentiment spillover may weigh on currencies like the Singapore
dollar, Thai baht, and Mexican peso as correlations rise, according to Barclays Bank Plc
Weakness in the construction sector may see currencies of commodity-led economies, such as the Chilean peso and South African rand, suffer,
she said.The Australian dollar, which often trades as a proxy for China, has lost more than 3% this quarter, the worst performer in the
exposure to the market and are looking for alternatives in the rest of the region
Overseas holdings of Chinese sovereign notes are at the lowest share of the total market since 2019, according to Bloomberg calculations
Global funds had turned more bullish on the local currency bonds of South Korea and Indonesia as central banks there near the end of their
interest-rate hiking cycles
An MSCI index that tracks global companies with the biggest exposure to China has retreated 9.3% this month, nearly double the decline in
Luxury goods firms such as Louis Vuitton bags-maker LVMH, Gucci-owner Kering SA and Hermes International are particularly vulnerable to any
wobbles in Chinese demand.
