Fear of contagion as Chinese real estate firm collapses
Sam Collins writes for The Telegraph
Julian Jessop quoted by the Express
The Express wrote:
“China is now a key player in the global economy, so the worry is that any problems there will drag down the rest of the world. After all, the global financial crisis of 2008 was triggered by a slump in the US housing market. The immediate contagion from the problems at Country Garden should be limited.
”China’s property market is dominated by local companies and the authorities have the tools to manage the fallout (for example, forcing state banks to keep lending). But prolonged weakness in this sector will be a major drag on Chinese growth for many years.
“A big part of the problem with contagion is uncertainty and this is often greater in China, given the lack of reliable information. There are a number of ways in which a crisis there could affect us, including weakening Chinese demand for UK exports, Chinese companies dumping goods on Western markets, or Chinese investors taking money out of the UK to prop up operations at home. With China you never quite know!”
You can read the full article here.