China Slumps | Global Markets React

The Greek Economic crisis had a direct impact on the recruitment strategies adopted by firms across the industry. During the crisis, many of the big investment banks took a conservative approach to their recruitment, whilst some completely halted their recruitment temporarily. Many Industry experts suggested the uncertainty of the Chinese Stock market wouldn’t have a direct financial impact across the globe. However, the slower economic growth is a concern for countries exporting goods to China.

Following three decades of over 10% economic growth, China has set a target of 7% for 2015. However, figures suggest this is indeed much lower than that, the economic slowdown, along with a rise in national debt; this created a debt bubble which eventually burst on the 12th June. As a direct result of the Shanghai Composite losing all its gains made in 2015 with 8.5% decline, markets across the globe felt the impact

As a direct result of the Shanghai Composite losing all its gains made in 2015 with 8.5% decline, markets across the globe felt the impact.Following on, Chinese government took rigorous steps to take control by cutting interest rates – making this the fifth since November 2014. 

Impact on the Global Markets:

• FTSE 100 fell below the 6,000 mark, its lowest since 2013 as markets panicked over China’s ‘Black Monday’. (A 16% decline from its high of 7,100 in April).
• This was a direct result of the Shanghai Composite, lost all its gains made in 2015 by falling more than 8%.
• Japan’s Nikkei also experienced its biggest drop since June 2013, panic selling and a shift to safer investments caused other stock markets to decline alongside.
• Honk Kong’s Hang Shen lost 4.6% and dropped to 21,378.
• The FTSE 100 dropped by 2.6% to 5,950.
• Germany's DAX fell by 320 points below the 10,000 points mark, dropping more than 20% since its high in April 2015, while France's CAC 40 lost around 3.2% over the weekend.
• Indian market had taken the biggest hit with its bench mark Sansex declined by 16,000.

Main Exporters to China:                                 

• Oil – Saudi Arabia, Russia
• Cars – Germany, Japan
• Iron – Australia, Brazil 
• Copper – Chile, Peru
• Circuits – Taiwan, Hong Kong
• Soy Beans – US, Brazil

China’s imports as a percentage of world total. 

• Oil : 14.4%
• Cars: 6.3%
• Iron Ore: 57.7%
• Copper Ore: 31%
• Soya Beans: 57.7%
• Integrated Circuits: 31.8%

In this instance, only 2% of shares on the Chinese Markets are owned by foreign investors, with so little foreign Investment in China it is unlikely to have a major impact on the recruitment strategies in place within the UK.