At the top of most economists' worry list for 2016 is the
risk that the Chinese economy crashes. Such concerns have led to
wild gyrations in Chinese equity markets. The Shanghai exchange was
frozen twice in the first week of trading this year, after big
sell-offs triggered 'circuit-breakers' designed to stop
panic selling. Despite the best efforts of the authorities, Chinese
stocks have collapsed, with the benchmark Shanghai index down 23%
this year, to almost half last summer's levels.
The effects of the rout in Chinese stocks and the slowdown in
its economy have rippled out across the world.
Trade, supply chain and investment links between China and
neighbours, including Japan and South Korea, have acted as conduits
for the Chinese slowdown to the rest of the region. Slowing Chinese
growth has removed one of the key supports for energy and commodity
prices. Lower commodity prices, in turn, have had a devastating
effect on growth in commodity-dependent nations
