Source: Bloomberg

The Chinese economy should have driven one -third of the world's economic growth this year, so in recent months, the Chinese economy has significantly slowed down the alarm bells around the world.

With the decline in the import of various products from architecture materials to electronic products, decision makers in various places see the impact of the local economy.Caterpillar said that China's demand for construction machinery is not as good as expected, and US President Biden even described China's economic issues as "ticking timing bombs."

Global investors have withdrawn more than $ 10 billion from the Chinese stock market, and most of them sell blue chip stocks.Goldman Sachs Group and Morgan Stanley lowered the target level of Chinese stocks, and Goldman Sachs also warned the risk of overflowing to Asia.

So far, the trade of the Asian economy and African countries has suffered the greatest impact.After reducing the purchase of cars and chips in China, Japan's report has fallen for the first time in July for more than two years.From South Korea to Thailand's central bank, the forecast of economic growth last week has mentioned that China's economic recovery is insufficient.

However, it's not all bad things.The slowdown in China's economy will lower global oil prices, and China falling into shrinkage means that the price of goods transported to the world has decreased.This is beneficial to countries such as the United States and Britain who are still fighting high inflation.

India and other emerging markets have also seen opportunities, and are expected to attract foreign investment that may leave China.

But as the second largest economy in the world, the long -term slowdown of China's economy will be more harmful to the world, not beneficial.The analysis of the International Monetary Fund (IMF) shows this interest relationship. If China's economic growth rate increases by 1 percentage point, the global economic expansion rate will increase by about 0.3 percentage points.

China Shielding is "not so bad" for the global economy, Peter Berezin, chief global strategist at BCA Research, said in an interview with Bloomberg TV."However, if the other parts of the world are in a decline in the United States and Europe, if China is still weak, it will be troublesome -to China, to the entire global economy."

The following is the impact of China's economic slowdown on various economies and financial markets.

Trade decline

Many countries and regions, especially Asian countries and regions, rely on China as the largest export market and sell electronic components, food to metal and energy.

As the demand has fallen from the high level of records during the epidemic period, China's imports have declined for 9 months in the past 10 months.The amount of goods imported from Africa, Asia and North America in July decreased year -on -year.

Africa and Asia have the greatest impact, and the imports in the first seven months of this year fell by more than 14%.Some reasons are that the demand for electronic parts in South Korea and Taiwan has declined, and the price of commodities declines, such as fossil fuel, which also affects the value of commodity transported to China.

So far, the actual exports of commodities such as iron and copper ore have been maintained in China.But if the economy slows down, shipments may be affected, which will affect miners in Australia, South America and other places in the world.

Tongshin pressure

Chinese producers have shrunk in the past 10 months, which means that the prices of Chinese export products are declining.This is good news for people who are still struggling in high inflation.

The Chinese commodity prices at the US terminal have declined every month since this year. Before the return of factory prices in China, this situation may continue.Wells Fargo economists estimate that if China "hard landing" -the definition of departure trend will increase by 12.5%, the baseline prediction of American consumer inflation rate in 2025 will be reduced by 0.7 percentage points to 1.4%.

Tourism rebound slowly

Chinese consumers' expenditures in travel and tourism services are higher than expenditures on goods, but they have not yet gone overseas.It was not until recently that the government has relaxed to travel to many countries, and the flight is still insufficient, which means that travel is much more expensive than before the epidemic.

The weakness of the epidemic and economy inhibits the income of the Chinese, and the fatigue market for several years means that the richness of the homeowner is not as good as before.This indicates that overseas travel may take a long time to rebound to the level before the outbreak of the epidemic, thereby cracking down on Southeast Asian countries that depend on tourism in Thailand.

Impact on the exchange rate

Since the beginning of this year, China's economic situation has led to more than 5%of the exchange rate of the RMB against the US dollar, and the RMB is close to 7.3 yuan this month.The People's Bank of China has increased its efforts to defend the RMB exchange rate, including the daily exchange rate intermediate price.

Bloomberg data shows that the depreciation of offshore RMB has a greater impact on currencies in Asia, Latin America and Central and Eastern European countries, and the correlation between RMB and other currencies is also increasing.

According to the Barclays Bank, as the correlation increases, the weak emotional overflow effect may put pressure on currency such as Xinyuan, Thai baht, and Mexico Peso.

"The Chinese economy has weakened, it is difficult to optimistic about the Asian economy and currency views, and we are more worried about metal -exposed currency," said Magdalena Pola, the head of macro research in PGIM LTD. emerging market macro research.The weak in the construction industry may cause the currency of the commodity leading economy, such as intellectual peso, South Africa Rand, etc. she said.

The Australian dollar is often regarded as a substitute for transactions in China. It has fallen by more than 3%in this quarter and performed the worst in G-10 currency.

Bonds lose charm

China's interest rate cut this year has reduced the attraction of its bonds to foreign investors. Foreign investors have reduced their opening and find substitutes in other markets in the area.

Bloomberg calculated that the proportion of foreign investment in Chinese sovereign bonds has reached the lowest level since 2019.The multinational fund is more optimistic about the local currency bonds in South Korea and Indonesia, where the central bank's interest rate hike cycle is close to the end.

Luxury stocks

From Nike to Caterpillar and other companies, they all reported that the slowdown of China's economic slowdown has impacted profits.A MSCI index that tracked the most multinational companies in China fell 9.3%this month, almost twice the global stock market index.

A index that measures European luxury goods and Thailand's tourism and leisure also echo the decline in China's shore stock benchmark index.Redmond Wong, a market strategist in Hong Kong in Hong Kong, said that these industries have accurately reflected the indirect openness of global investors to China and the continued economic prospects of China's economic prospects.

Luxury companies, such as LVMH, Guering Sa, and Hermes, are particularly vulnerable to fluctuations in Chinese demand.