If China sneezes...

Finweek English Edition - - The main stories this week -

WHAT HAP­PENED WE HAVE HEARD re­peat­edly that the world mar­kets catch the flu if Amer­ica sneezes. Last week, China sneezed, and the ef­fects were felt far out­side Shang­hai: the Dow Jones in­dus­trial in­dex recorded its big­gest fall since the ter­ror at­tacks on 11 Septem­ber 2001, the Nikkei in­dex in Ja­pan fell by 3,6% overnight and the JSE all-share in­dex dropped to its low­est level in more than five months.

WHAT OTH­ERS SAID BUSI­NESS DAY said that any­thing will rat­tle the mar­kets, be­cause they’ve been over­heated for months. China’s 9% dip, the largest mar­ket tum­ble in a decade, was merely the cat­a­lyst. It should rather be seen as a nec­es­sary cor­rec­tion and not the start of eq­uity woes, the pa­per says. Beeld said, “It’s a pre­lude to the enor­mous change that the emer­gence of China will play in the world econ­omy.”

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