First China and the United States, then the world

http://www.usnews.com/news/business/articles/2016-01-04/factory-slumps-in-us-and-china-heighten-global-economy-fears

This article is stating that because China’s economy is dropping, so is the United States’ economy. Both of these are very large economic powers in the world and they are both depressing which could potentially have some very negative repercussions. This drop in these major influencing countries could possibly lead to smaller neighbouring countries falling as well.

              Both Australia and Brazil have slowed in growth, and this article is saying that this is because of the United States and China’s drop. Both the United States and China are really big countries that have large populations and a large amount of imports and exports. Therefore if they have to slow their exports and imports, then it will affect everyone that has any part of these transactions / trades. This article explains that the United States’ exports to China has dropped 4 percent, which may not seem like a lot but I was thinking about how much we trade each other, and 4 percent of that is still worth a lot of money. I was reading another article for this project and it said that the stocks for these countries has dropped more than 10 percent. That is a lot and a bit worrisome.

              It is scary to think that these drops could continue and bring worse problems. If our biggest economic contributors are falling exponentially then the world should be ready to support themselves. As I have been reading the Princeton Review, I have been learning about how much each action for the economy effects other issues. If the United States and China are falling, it won’t be long before everyone else is too. We might even see some new countries come to power.

The three "if's" that could lead to China's demise

http://www.businessinsider.com/3-big-ifs-in-chinas-economy-2016-1

China’s stock has dropped 7 percent. It is hanging on three very important aspects of its economy to either bring it up or destroy it completely. These issues include its currency, its corporate sector and its housing market. All of these things make or break an economy and if one falls, another could too.

Last year, Chinas economy was beginning to deplete and the currency was devalued to the United States dollar. They seemed to stabilize it for a short while but then, yet again the value began to drop. It is still falling today. Currency is a big deal in any economy because it is used to determine value of products and can create major debt if the value of products is more than the value of the currency.

Another issue in China is its corporate sector. This includes all of the industrial, management, and properties sections, which make up the import and export of China’s money. Since all of these are losing their growth, China is having issues because they were the reason that China was so powerful in the first place. The fact that they are diminishing is making China lose power and go into debt. If they don’t restructure and figure out their crisis, it will just get worse.

The last problem in the three is the housing sector. This year the Chinese built all of these new houses but ended up with 17.8 percent of unsold housing. This means all the money they spent trying to profit is now putting them into debt. This is strange to me because Chinas population is still growing but these houses aren’t being bought- does this mean that people are aware of the economy situation and are saving their money because they know they will need it?

Finally, all of these issues within the Chinese economy lead into the drop in the stock market, because as a whole, the economy is losing its value and is not booming as it was before. I believe that china needs to assess every issue individually and see how they affect each other before raising taxes or making mistakes that will just put them into more debt. My prediction is that they will continue to lose value before anything is fixed.