A Chinese Economic Downturn Could Have Domino Effect In U.S.

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As projections show that China will likely miss their 5% growth target this year, there is growing concern that it could have a ripple effect in the U.S.  China is facing an unemployment rate of over 21% of young people and a property market bubble that has already burst.  Gabriel Wildau, managing director at consulting firm Teneo, said that Beijing has different priorities than economic growth. He said, “A tepid response to the cratering housing market would indicate that the top leadership’s reduced emphasis on economic growth — in favor of priorities like national security and technological self-sufficiency — is more far-reaching than we anticipated.” Erin Walsh, senior research fellow at the Heritage Foundation’s Asian Studies Center, said, “American businesses with large investments reliant on the Chinese economy…need to be making plans now to diversify their markets.” Beijing cut interest rates last week but some experts say it’s not enough and Chinese currency may soon depreciate.