What is the impact of the subprime mortgage crisis on China?

What the subprime mortgage crisis of 2007 taught us?

Since the United States has a large share of the global economy, it will have a negative impact on the global economy.

The crisis in the U.S. subprime mortgage market is showing signs of deterioration, causing violent turmoil in the U.S. Investors are concerned that the subprime mortgage market crisis will spread to the entire financial market, affecting consumer credit and corporate financing, which in turn will hurt the growth of the US economy.

But at first, many analysts believed that the subprime mortgage market crisis was expected to be contained on a local scale, and it was unlikely that it would pose a major threat to the US economy as a whole.

But for now, the subprime mortgage crisis has seriously affected the world economy, according to the latest data, the United States GDP has fallen in the second quarter, and it fell by 0.5 percent, which has declared the US economy into a recession, and the US economy is expected to continue to be sluggish.

Impact on the global economy

Bankers at the world's major central banks have been concentrating on stopping the liquidity shortages in the money markets caused by the subprime mortgage crisis in the United States, pumping large amounts of cash.

Not only that, but the Fed has also lowered the discount rate. These efforts have paid off, and currency markets have stabilized. However, many bond products, especially asset-backed**, remain subdued.

In addition to fears of renewed disruption in credit markets, bankers are currently most concerned about the impact of credit market turmoil on the global economy. It is generally believed that the United States, the birthplace of the subprime mortgage crisis, will be the most affected.

At first glance, the US economy was not affected by the subprime mortgage crisis: economic growth was very strong in the second quarter; Business spending looks buoyant; Wage growth is steady; Gasoline**, which is pulling consumer spending down, is falling. But on closer analysis, the outlook is less bright.

Some commentators believe that the economic crisis in the United States in the 70s has not been resolved at all, the debt has increased year by year, and there has been no surplus since 1975. Whether it is the Keynesian Roosevelt New Deal or the neoliberalism that replaced it in the seventies, the United States will not be able to escape its economic crisis fundamentally without addressing the gap between social distribution and aggregate demand and aggregate supply.

The impact of the subprime mortgage crisis on the Chinese economy cannot be ignored due to the slowdown in the US economy and global economic growth, and the impact on exports is the most important. In 2007, due to weak import demand from the United States and Europe, China's monthly export growth rate has declined from February 2007 to December.

On the one hand, China's economic growth will slow down to a certain extent, and at the same time, due to the slowdown in China's economic growth, the society's demand for labor force will be less than the supply of labor, which will increase the employment pressure of the whole society.