16:18 GMT26 September 2020
Listen Live
    World
    Get short URL
    3205
    Subscribe

    A recent stock market collapse in China was largely caused by the weakening yuan, according to the Eurasian Development Bank's chief economist Yaroslavl Lisovolik, who also warned that the global economy could suffer if the Celestial Kingdom falters.

    Yaroslav Lisovolik, the chief economist of the Eurasian Development Bank believes that the weakening yuan added greatly to a recent stock market crash in China, the Russian news website RBK reported.

    He also warned that the Chinese economy had accumulated a whole array of problems that will cause concern among investors throughout the year and even endanger the world economy.

    "The beginning of this year indicates that the deterioration in the dynamics of economic growth in China is becoming one of the key risks to the global economy," Lisovolik pointed out.

    He was echoed by experts from the independent economic research consultancy Gavekal Dragonomics, who at the same time remained optimistic about the future of China's stock market.

    "The depreciation of the yuan caused fears of a major devaluation that China may stage in order to spend to support economic growth. The fears were exacerbated by the fall of the Chinese market, but we do not believe in the feasibility of these fears," they said.

    Gazprombank's chief economic forecasting expert Yegor Susin, for his part, claimed that the Chinese stock market turmoil was triggered by the country's economic slowdown and the current ban on share sales by major shareholders in China.

    Earlier, Moody's Investors Service said in a press release that the latest stock market collapse in China is an indication of difficulties that Beijing is facing in implementing economic reforms.

    Last Thursday's seven percent fall at the Shanghai and Shenzhen stock exchanges triggered the new Chinese stock market circuit-breaker mechanism for the second time this year, prompting shockwaves around the world. China's trade suspension was followed by a one percent stock market slide on Wall Street;  European stock markets slumped by two percent late Thursday afternoon.

    Related:

    Another Bubble? China’s Corporate Bonds Market Surges on Shadow Investment
    China Eases Market Regulations as Confidence Builds
    Europe Split Over Plans to Support China's Market Economy Status
    China's Central Bank Stimulates Debt Market, Nation Posts Mediocre Growth
    Tags:
    growth, investors, economy, stock market, yuan, China
    Community standardsDiscussion