October 24, 2022, 11:32 am EDT
The collapse of China’s Stock Market
When Xi Jinping was happy with his leadership with 6 other allies in the communist party of China, the stock market in large-cap (FXI) and Hongkong (EWH) plunged -10% and -6%, respectively.
China released its Q2 GDP of 3.9% but it does not help to slow down the downhill ride.
It is essential to know this situation because China is the #2 economic system in the world, after the USA. If Russia can create trouble for the world, then China can do much more harmful action to the globe in terms of economy and military.
We believe Xi’s empire would be a disaster to the world in the next five years. Currently, the US and Europe are heavily dependent on China for its goods as trader partners. So, it would take time to cut off the tie, though the process has sped up recently.
The US strengthening its defense system does not aim at Russia only but points to China also. In our opinion, China would become much more aggressive toward Taiwan, Japan, and the USA in the future. The potential confrontation between China and the rest of the world would escalate higher.