Steep declines continue in global stocks and commodities. Since last week, the Dow Jones Industrial Average has dropped as much as 1000 points amid fear of Chinese financial weakness. Investors are concerned that China’s economic growth is declining.
According to the Wall Street Journal:
Fears that China’s economy is slowing dramatically sparked the heavy selling around the globe in recent days. Beijing’s unexpected move to devalue its currency two weeks ago raised the alarm that the world’s second-largest economy may be in worse shape than many had thought. Since then, weak economic data have fueled worries that a drop-off in Chinese growth could cause a global slowdown.
Concerns continue to escalate today as Chinese officials have not taken steps to limit the damage being done to the Chinese economy.
“Most obviously this is about China and the risk of a financial system crisis there. But sometimes the market organism takes over and develops a logic of its own,” Valentijn van Nieuwenhuijzen told WSJ.