Fears of a housing bubble. The Shanghai stock market crash. Disappointing economic data on exports and plunging auto sales. And now this.
A few years ago, China’s move to devalue its currency would likely have been seen as a positive development. The International Monetary Fund (IMF) welcomed the August 11 news that China had made a step toward a less tightly controlled currency but said the country had far to go “as it strives to give market forces a decisive role in the economy and is rapidly integrating into global financial markets.”
“Demand for pretty much everything that’s imported into China is likely to slow,” said Sherry Cooper, chief economist for Dominion Lending, “which is why commodity prices have fallen once again and, most importantly for Canada, oil prices are down.”