China recently had a major financial issue. This particular issue was referred to as Black Monday, and Black Monday has had shockwaves all around the world. In this article we will look at describing to you what Black Monday meant for the world.
It has had shockwaves, and it does have a deeper impact that many economies and markets will feel for years to come. The aim of this article is to make the Black Monday issue as simple and clear as possible, so you can be better informed about it.
Essentially speaking, Black Monday happened when nearly 9% of the main financial markets index in China fell. This means that the index suffered the worst ever fall and drop since 2007. For obvious reasons, this has affected China’s economy.
But the strength and the power of China as a nation has an impact across the world. So this means that the Black Monday effect has had a particularly strong impact upon economies such as the UK economy.
One particular area in which there could be serious problems in the years to come is the property market. There are some very wealthy investors in China, and one of the biggest areas in which they invest in the UK is the high end property market. Chinese investors account for much of the high-end property portfolio in London, for example.
In fact, they are rivalled only by the Russian investor market. With so many wealthy investors being affected by that 9% drop, there are real fears that they could invest less in the high-end property market in the United Kingdom.
And if there is less investment in the high-end property market, this will naturally have an impact on investment in property all around the country, at all levels of investment. Thankfully, there have been no clear signs yet that this would be the case. But expert analysts feel that it could happen any time soon.
In the manufacturing industry, the UK government has often recommended that UK businesses look to emerging markets like China. The good relationships that have been built up over the years could be affected by Black Monday. With less confidence in China, this could mean that business relationships that took years to develop could be at risk.
This can also affect the trade between the two countries, and growth in the UK. With so many companies investing so heavily in Chinese suppliers, this could have a massive impact on the quality of the manufacturing that happens in this country.
Unlike the property issue, there could well be a quicker downfall and decline in the manufacturing industry in the UK due to Black Monday. This is principally due to the fact that so many UK manufacturers are buying abroad.
While the true impact of black Monday has not been felt by the United Kingdom yet, there are signs that their problems could really start to manifest in the years ahead. Therefore, Black Monday did not just affect China, but it also had an impact and will continue to impact upon the rest of the world.