How the Chinese Stock Market Affects Manufacturing Overseas

Just recently the Shanghai Index started crashing leaving everyone asking “why?” Did it have to do with the price of oil being so low, was it because the Federal Reserve thinking about raising its interest rates? Perhaps it was as simple as the Chinese stock market just needed a correction. There are many different theories on the horizon, but as the world’s second largest economy, those working in the manufacturing sector were a bit rattled to say the least. How does the Chinese stock market affect the manufacturing of goods overseas?

China’s Economy and Manufacturing

When the Chinese stock market was having its meltdown, China came out and stated that their manufacturing data had been the lowest level in 77 months. Investors might have been panicking a bit as many other countries rely on Chinese Imports. Although this is a concern for the manufacturing sector for other countries for the United States, it had very little consequences. Trade deals between the United States and other countries could easily make up the slack if China were truly in trouble. China also has another ace up their sleeve as they can also stimulate their economy through stimulus packages.

Overseas Manufacturing Drives the World’s Economy

Looking at the burst in China’s economy through their stock market seemed like a scary nose dive for many investors as manufacturing numbers seemed weak. But as with time the Chinese stock market has rebounded showing that it was only a mere pullback. China has the means and methods to keep marching forward as the world’s second-largest economy, and although there might be hiccups in the stock market and some of its data, China will still push forward.