It's been fairly well known that Europe is encountering severe economic problems again, with several of the EU nations sinking back into recession, but China's financial slowdown may be even worse. Given the nature of China's heavy-handed government, it's hard to come by reliable economic figures, but we can tell that the country's stock market has been performing abysmally lately.
For a long time, China's Shanghai composite index tracked our own markets here in the U.S. pretty closely, only in stronger terms. From 2005 to 2007, while U.S. markets were bullish, the Shanghai more than quadrupled. The Shanghai crashed in 2008, just as our markets did, and ended up losing an astonishing 70 percent of its value. Both countries' markets began rebounding in 2009.
That's where the parallels end. While American stocks have been strong ever since March of 2009, the Shanghai index is down about 40 percent from where it stood in July 2009. And if the economic slowdown in China is as bad as some watchers fear, it may be a long while before the market makes up that ground.
No comments:
Post a Comment