| Stock markets in China suffered the biggest crash since 2007 with a drastic drop of 8,48% in Shanghai and 7,59% in Shenzhen. The fall occurred despite the measures taken by the Chinese government to shore up the market and its effects were felt throughout the planet. Jorge Todesca, chief economist of the Finsoport Consultant, gave his opinion in this regard in the Database (Monday to Friday, from 8 to 10, Radio Meridiano 107.1).
What is happening with the Asian giant? Can a crisis impact the region?
The Chinese economy has long entered a path of slower growth than it had a few years ago. They were growing at rates of up to 11% annually, and now they grow at an enviable 7% annually. That great growth was fueled by a large investment, a part of which was made in the real estate market. An enthusiasm bubble was created that artificially pushed the stock market and stock price up. It is a process that we see is adjusting. The Chinese government is contributing funds and buying shares on the stock market, to prevent the market from collapsing even more deeply.
Does this have any point of contact with what was the mortgage crisis in the US?
The mortgage crisis occurred because people who were unable to pay those mortgages were being loaned. In China it does not happen this way, it is not that there is a small buyer who could not pay the loan, but that in the euphoria they overinvested and the prices on the stock market increased. As we know, here we have very strong commercial ties with China, although commercially deficient. We have a deficit of around 5 thousand million u$s, between what we import and what we export. What we export is also falling. China is an important actor in this situation, which is internationally called the "great recession", since it encompasses the US, Europe and Asia.
Whenever we talk about what we sell to China, we say that there is a certain inflexibility regarding the products that we send them because it is food, which is a basic question. In any case, one thinks that being a giant if the impact falls, it can be very large. Is the consumption of the Chinese likely to be significantly affected?
Our exports as a whole, not only by the Chinese, have fallen by 18% in the first 6 months of the year. In this period of the year we have a small positive trade balance of u$s 700 M, that is already having an impact. All this situation that we are having with the dollar, of more exchange pressure, has to do with the fact that the income of dollars that Argentina is receiving for its foreign trade is much less and has to do with the crisis that Brazil is experiencing, which It also means that we can export less, and of course due to our own mistakes, which are fundamental.
China has been saving us from a financial point of view, could this sort of stock market crisis they are having affect this policy? Or is it a state-to-state question that shouldn't be touched?
I don't think it affects. On the one hand it is a matter of state to state, and on the other hand what China has with Argentina is truly, for these magnitudes of which we are speaking, a drop of water in the ocean. Because it is so small, it will not be affected.
SOURCE: PUNTO BIZ |
