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These 8 Charts Show How China’s Economy Meltdown Spreads To The World



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Aug 23 2015
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Dow plunges 530.94 points on Friday. With more than 1,000-point drop this week, this was the largest weekly drop since Oct 10, 2008 for Dow. Crude oil prices briefly dropped below US$40 a barrel on Friday, the lowest seen since the financial crisis. The effect of devaluation of the Chinese Yuan has finally reached the United States.

Charts Show China Economy Slowdown Spreads To The World - Crude WTI Oil Lowest

Not only China’s economy is slowing, but recessions in Latin America countries – Brazil and Chile – are not helping the situation. The scariest part was, of course, the latest manufacturing data from China. The idea was this – if China’s manufacturing is slowing, it means consumption is struggling.

 

The Caixin-Markit China Manufacturing Purchasing Managers’ Index (PMI), dropped to 47.1 in the first 3-weeks of August, down from 47.8 in July, its worst reading since the depths of the financial crisis. This is one of the most independent data available to analysts and economists who wanted to know the health of China’s economy.

Made in China Manufacturing Label

Here’re some charts that are spooking economies around the world. And this could be just the beginning. Some said China is going through what the America had gone through during the 1929 Depression. It may or may not be true, depending on how the Chinese plans to combat this slowdown, which they have zero experience of doing so, historically speaking.

 

{ 1 }  Shanghai Composite Index Tumbles

Charts Show China Economy Slowdown Spreads To The World - Shanghai Composite Index
When China devalues its currency last week on 11 Aug, 2015, its stock market should rejoice and rebound. It did for a while, but has been dropping like a rock for the last 5-days, erasing 156-points.

 

 

{ 2 }  Emerging Market Currencies Collapse

Charts Show China Economy Slowdown Spreads To The World - Emerging Market Currencies Tumble
Instead of going up and feel proud of it, developing countries are doing exactly the opposite. They’re competing to make their currencies go down. After China, Vietnam became the second country in Asia devaluing its Dong, follows by Kazakhstan. Malaysia’s ringgit weakened to a 17-year low, the worst developing-nation performance this month after Russia’s ruble.

 

 

{ 3 }  Commodities Plunge to 13-Year Low

Charts Show China Economy Slowdown Spreads To The World - Commodities Plunge 13-Year Low
Copper, steel, oil, nickel, zinc, aluminium, tin are some of the main commodities in huge demand during China’s bullish period. China’s growth is synonym with prices of these commodities. If the Bloomberg Commodity Index is any indicator, the consumption by China is at its lowest since 2002.

 

 

{ 4 }  Global Stocks Wipe Out This Year’s Gain

Charts Show China Economy Slowdown Spreads To The World - Developed and Emerging Stocks Erase
European stock markets have officially entered its correction stage. This week’s Thursday and Friday plunge could be the beginning of a serious U.S. stock market plunge. Stock markets in Hong Kong, Indonesia, Taiwan and Malaysia have also entered bear markets.

 

 

{ 5 }  Gold Skyrockets

Charts Show China Economy Slowdown Spreads To The World - Gold Skyrockets
Gold, traditionally a safe haven during uncertainties and crisis skyrockets the most in 7-months this week alone, from a 5-year low. Investors are now betting there will be no interest rate hike at all this year, hence pumping their money into the precious metal. That’s what they normally do when they’ve nowhere to park their money.

 

 

{ 6 }  U.S. Treasury Yields Collapse

Charts Show China Economy Slowdown Spreads To The World - US Treasury Yields Collapse
As demand skyrockets, U.S. Treasury yields on 10-year notes plunged to the lowest since April this year. Besides gold, investors are dumping their money into fixed income after selling off their shares. From Australia to Britain, all the government debts were snapped up like hot cake.

 

 

{ 7 }  Caixin-Markit China PMI Collapse

Charts Show China Economy Slowdown Spreads To The World - Caixin China Output PMI

A PMI index released by Markit showed that growth in the US manufacturing sector slowed unexpectedly to its weakest pace in almost two years in August, dipping to 52.9 from 53.8 in July. The latest Caixin-Markit China Manufacturing Purchasing Managers’ Index (PMI) also showed its worst reading since the U.S. financial crisis in 2008.

 

 

{ 8 }  Bloomberg Billionaire Index Collapse

Charts Show China Economy Slowdown Spreads To The World - World 400 Richest People Biggest Losses
Bloomberg has started tracking the world’s 400 richest people via its Bloomberg Billionaire Index since September 2014. These 400 people have lost US$182 billion this week, the biggest since the creation of the index. On Friday alone, they have lost US$76 billion. As bad as it looks, they still have US$3.98 trillion in net worth. China’s 26 richest people have lost US$18.8 billion during the week.

 

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