Akara Group International:
Points to Chinese Policies Likely to Contribute Further to Global Deflation.
Akara Group International says China’s recent policies are compounding global deflation woes as the Fed refuse to blame market volatility.
As 2016 continues to add economic pressure to global growth, Akara Group International’s Chief Economic Strategist, Mr. Tyler Sheldon presented his views on recent Chinese policies that are likely to weight further.
“Three years ago the world looked in expectation as China’s powerhouse economy appeared to be propping up a faltering global economy. Since then the world has changed quite dramatically and China has also suffered from the slowdown, which was most evident in 2015 as the Shanghai Composite was subject to a number of negative beatings.”
“What we have seen in the wake of 2015’s stock issues, is a devaluation in the price of the Yuan currency, which has enabled China to offload a stockpile of resources such as steel, aluminium and a number of petro-products. This also will undoubtedly have a knock on effect to pricing in basic materials and manufacturing goods.”
Whilst such action can not be deemed intentional, policies throughout China can be judged as opportunistic as the world’s second largest economy continues to face GDP growth issues in the same manner as other leading economies have in recent times, most evident in the United States as the country continues to feel the strain of late cycle growth pressures.
“As China has been able to offload large quantities of stockpiled receives, the United States has been unable to maintain a competitive supply of like for like resources. This action become all too obvious as the Fed’s Janet Yellen seemed to concede that financial conditions in the United States have become less supportive of growth. Compound this statement with credit spreads and the turbulent equity market conditions, we can only assume that the press to raise interest rates will again be at the forefront of the Fed’s policy agenda,” continued Akara Group International’s Mr. Tyler Sheldon.
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