Though China is about 6,500 miles away from the U.S., uncertainty in the Chinese economy can create big changes in ours. This past week, big drops in the Shanghai Composite stock index created a mini-panic in our own economy.
Clayton Dube, director of USC’s US-China Institute, says China’s reach goes beyond the United States, too:
“What has been going on for about five, six, maybe seven years, is that China has been responsible for the bulk of the economic growth worldwide. And that’s because the economic engine of China has been humming along, when for part of that time, the American economy was sputtering in the great financial crisis. So, China has been driving the world economy. About a year and a half ago, the Chinese economy began to slow. Despite that slowing, Chinese investors have poured into the stock market, driving valuations really quite high. About two months ago, they began to pull out. Over the last 10 weeks or so, the market has dropped by 42 percent.“
Click play above to learn more about China’s economy and future.
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