The Shanghai Composite plunged more than 6 percent today — its biggest one-day drop in a month — amid growing fears about the health of the world’s second-biggest economy. This happened while global financial leaders are convening in Shanghai for the G20 meeting, the group of the world’s 20 largest economies.
Marketplace China Bureau Chief Rob Schmitz says one of the big questions the world’s top financial officials have is how China will help drive global economic growth if it's markets and currency appear to be unstable. Schmitz told Marketplace Morning Report Host David Brancaccio that China’s top central bank officials were on deck to do their best to reassure everyone.
“We want to have stability," said deputy governor of the People’s Bank of China Yi Gang to delegates over lunch. "To have that, we need robust growth rate. We also want to keep the exchange rate, more or less, stable. A stable situation is good for everybody.”
Schmitz reported delegates listened politely, but many of them had questions. "When you see this amount of capital outflow, you know there’s an imbalance," said Luke Spajic, an executive at PIMCO Asia, when discussing China's currency. "And this imbalance means there is likely to be currency evaluation going forward. In other words, the price right now just doesn’t feel right.”