The global su­per cy­cle that pow­ered the world econ­omy over the last two decades and sent stocks, com­modi­ties and prop­erty to his­toric highs, has run its course. As China’s eco­nomic mir­a­cle starts to un­ravel, it’s time to pre­pare for a long, cold win­ter.

Finweek English Edition - - INSIDE - BY CIARAN RYAN

Cover story: Ciaran Ryan, Liesl Peyper and Buhle Ndweni Cover lay­out: Beku Mbotoli

Cover story lay­out: Zan­dri van Zyl

Sea­soned mar­ket watch­ers knew some­thing was amiss when China’s stock mar­ket cracked in July. There was panic in the sell-off, de­spite re­as­sur­ance from some an­a­lysts that this was just a blip on the screen and nor­mal ser­vices would soon be re­sumed.

The Shang­hai Com­pos­ite In­dex has lost nearly 40% of its value since June, wip­ing out bil­lions of dol­lars in wealth. The Chi­nese gov­ern­ment dropped in­ter­est rates for the fifth time in nine months and de­val­ued the yuan to keep money f low­ing into what is now start­ing to look like a dan­ger­ously dis­tended bub­ble econ­omy.

The cur­rency mar­kets went wild as in­vestors ran for cover of the US dol­lar, and the much-an­tic­i­pated hike in US in­ter­est rates – due to start in Septem­ber – may now be put on hold. Sud­denly, the one cer­tainty that car­ried the global econ­omy out of the 2008 f inan­cial bust – that of China’s emer­gence as an eco­nomic force of na­ture – ap­peared to rest on shaky foun­da­tions.

The other cer­tainty to emerge in re­cent weeks is that the decades-long

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