FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 29 January 2016

China's Recent Struggles and Proposed Strategies Moving Forward

Written by

On January 7th China's renminbi devalued 0.5% to 6.5646 per dollar, the lowest it's been valued against the US currency since March 2011. Following this news, the Shanghai Composite dropped 7% in a matter of 30 minutes before officials shut down the market prematurely. Paired with the recent announcement of China's 6.9% GDP growth, their slowest in 25 years, questions have been raised over the country's stability and potential moving forward.

Worries over China's growing debt, changing demographic structure, and weakening ability to effectively use government policies have pushed many economists and Chinese officials to project tougher years ahead. Furthermore, the total capital outflows for the year 2015 have been estimated at as much as $1 trillion, according to Bloomberg, which is only hurting investor confidence more. Many are still skeptical of the reliability of China's growth figures and these findings have only strengthened worries. Dropping oil prices and shaky commodity markets have contributed to a plunging Shanghai Composite, which YTD has erased all gains and ended lower by 444.667 points.

Chinese officials hope to ease credit to consumers moving forward and propel this sector of the economy, though they face a balancing act of not putting too much downward pressure on the yuan. Much of the worry rests on the amount of money leaving the country in search of safer investments, though Chinese officials are considering lowering the reserve requirement ratio to encourage more lending at home, namely through a higher level of consumption by consumers. Exporters have also began holding their earnings in USD, as opposed to converting them into yuan, which has fed into the fear held about the country's future potential. The biggest concern of investors has been the lack of communication of the People's Bank policies, as well as confidence in their ability to uphold the currency.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
From Money Controlling People to People Controlling Money
Rising Tide Does Not Lift All Ships
News Blog
How The Space Station Avoids Junk In Space
Infographic Of The Day: The Most Popular Jobs In A Decade
Early And Late Cycle Verdicts Are Baseless
The Surprising Divergence Of Employment And Capacity Utilization
The Slump In Undocumented Immigration To The United States
U.S. Productivity Growth Flowing Downstream
Your Light Bulbs Could Be Playing Havoc With Your Health - Here's Why
Mentions Of Trump And Clinton In Hip Hop Lyrics
Salary Is The Most Important Job Criterion
Can Switch Replicate Nintendos Past Success
The Numbers Behind The Zumwalt
Docking A Huge Cruise Ship Is More Complicated Than You Think
New Seasonal Outlook Updates from NOAA and JAMSTEC - Let's Compare Them.
Investing Blog
FinTech Is Taking A Bite Out Of Banks
Options Early Assignment - Should You Worry?
Opinion Blog
The Beer Goggles Stock Market
US 2016 Election: Will US-China Relations Change
Precious Metals Blog
Preparing For Post-Election Social Unrest
Live Markets
21Oct2016 Market Close: Major US Indexes Close Flat On Low Volume, Crude Prices Resume Climb, US Dollar Stabilizes In Mid 98 Handle, Yes, Most Investors Are Worried Which Way This Market Will Go
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved