It has been a perfect storm for global financial markets. But the components of the storm are so varied that there will be no unity of opinion on the aftermath. Some of those components may be oversold others merely at the start of a long malaise. If there is a common denominator it is exaggeration of China’s role. Although China remains a partly closed economy, foreign markets have massively over-reacted to Beijing’s moves – for example the Aug. 25 cut in interest rates – saw New York briefly rebound by 2 percent until it was deemed more evidence of weak Chinese demand and suggesting further currency devaluation.
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