Experts’ predictions of an imminent hell in the world’s economy and markets currently follow the uncertainty unleashed by the generalized fall of the stock exchange and raw materials in the last few weeks.
Three successive devaluations of the yuan, the Chinese currency, is added to these predictions made by prominent specialists publicized on the Infowars website, according to which in due course will exploit a World financial crisis in epic proportions which will bring Europe, Japan and the United States to their knees. Due to this crisis, the planet will be left with serious consequences during the following five years.
The biggest collapse of the Chinese stock market from 2007 provoked a wave of contractions on Monday August 24, named Black Monday in the markets throughout the world whilst the price of oil has again marked its lowest level.
Again the effect dominated, wreaking havoc from which a sustained recovery is still not taking place in response to the growth nor to the stock-exchange values, therefore the big pillars in the World’s economy are in decline.
What is certain is that the economic deceleration of China is shaking the rest of the financial and productive scene on the planet which the emerging countries being not too far away and of course Latin America and the Caribbean too.
For a few years the region has felt the impact of the Chinese deceleration therefore the Economic Commission for Latin America and the Caribbean (CEPA in Spanish) showed in their most recent prediction that it would only grow by 0.5% this year, and they cited the fall of the prices of raw materials due to one of the main causes being the slowing down of the Asian giant.
Such an impact is already felt in the large producers of raw materials in the region, for example in Venezuela with the oil and in Chile with the copper (they export 47% of what they produce to Beijing).
The impact of the devaluation of the yuan is not insignificant either in the Latin American currencies, leaving the Brazilian Real to fall below 1% while the Chilean Peso has suffered an even more noticeable setback in 12 years.
Generally, the economists warn us that there will be countries affected, above all those that sell raw materials who export them to China: Brazil, Chile, Columbia, Argentina, Venezuela and Peru.
In Kamel Mellahi’s opinion, a specialist in emerging markets from Warwick Business School in the United Kingdom, it will be fundamental to see every economy’s ability to react and how they substitute the fall in raw materials.
There are countries like Mexico that can replace the Chinese Market with that of the United States.
Faced with the chaos which reigns in the international markets in an attempt to improve the exchange course, the Latin American governments can resort to the devaluation of the national currencies, something which will make them more competitive.
For Liu Baocheng, the director of the Center for International Business Ethics in China, escaping the present world situation requires a consensus of decisions that can have an important impact on the global financial market and raw materials.
‘If a world consensus is put together, we will see the structural changes that can lead the main economies of the World down the right path’, he said.
In his opinion, Beijing only takes some of the blame for the present crisis and China is capable of playing the central role in the recovery of the world economy.Share on FB Share on TT