Saturday, 06 June 2020


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Does dragoon fall asleep? China's economy loses gas trapped in its economic bubble

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The world economy slows its development, which is evident not only in the U.S. and Europe, but also in China; the economic giant will be to address a crisis? These negative changes in the global economic outlook have been exposed by the International Monetary Fund (IMF). In January this year, the IMF estimated a growth of 3.5% for 2013. In April, the forecast was lowered to 3.3% and on July 9 was revised to 3.1%. While the U.S. recession and Europe is no longer a new factor, the negative dynamics of China itself worries economists. Compared with January forecast was a decrease of 0.4%, and now the growth figure stood at 7.8%. Moreover, the Chinese economy began to face another series of serious problems, such as the collapse of the shares in the Shanghai Stock Exchange last month, remember the Japanese newspaper 'Nishinippon Shimbun. The index of interest rates soared because of the situation of trade in loans between banks. This process was arrested by the Central Bank of China with draconian measures designed to crush the Chinese bubble. The company launched a system for regulating interest rates against those banks that raised rates and actively they were selling high risk financial products. Capital is accumulated in areas such as real estate construction, where the Central Bank of China has little room for intervention, which has led to a bubble due to excessive influx of investment. Therefore, they take tough measures against banks that behave in this way. This is not only uncontrollable financial products, but of funds investment company of local authorities, of which they use to support the social basis of economic growth and employment in the regions. These organizations can lead to chaotic development, highlights Nishinippon Shimbun. Experts say it is difficult for a bubble to burst. However, in 2008 the global financial bubble burst with the collapse of one of the largest investment companies U.S. Lehman Brothers. "In the case of China, also not everything is so simple," says the Japanese newspaper. [caption id="" align="alignnone" width="630"]China bubble Corbis[/caption] Source
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