Saturday, August 29, 2015

BLACK MONDAY, UNRELY ON ECONOMY AND MANAGEMENT OF PEOPLE REPUBLIC OF CHINA



The effect  of Yuan devaluation and volatility of Capital market of PRC to the World economy every body knew it well and became the breaking news around the globe. The prediction of that policies not as good as we thought but confusing, questionable about economic management solidity of PRC government. 

PRC economy role after economic global crisis as a locomotive to Asia and the World, recently change to be disaster, as the mayor factor pushing money market to the valley of uncertainty especially in Asia country and BRICS. Since Black Monday, teh effect not only to emerging market countries but all over the globe.

Since Black Monday, stock market fell down around 3% in Asia Pacific market from Nikkey, Hang Seng, Shenzen, Sanghai to Singapore, Jakarta and Australia. Not only in Asia Pasific market, in Europe including Germany and USA fell down as well.

What happened in PRC and US capital market ? stock market fell down more deeply to 30%. Unimaginable how big financial assets disappeared caused by the fell down of stock prices.
That was why the Bankers and financial analysts who prophesied Remimbi (Yuan) become the Word elite currencies questionable of Economic management of PRC.
One good lesson for us not to rely on good analysis of well known economists or top Bankers in the World. We should think it over and over again before made a conclusion of an analysis.

Capital market of PRC begin to turn down since June 2015 until today even Government intervened actively including stocks buy back by a huge amount by the authority, not allowed a new IPO, not allowed sale of a lots of stocks, decreasing of pension funds limit to 30% and the new approach of market mechanism in foreign exchange management.

This Black Monday will cause a new global economic crisis if no perfect solution achieve in the near future.    















































Post a Comment