Home / Knowledge / News / Textiles / 'Chinese slowdown threat to global economy'
'Chinese slowdown threat to global economy'
28
May '16
China's faltering growth poses a "significant risk" to the global economy, Reserve Bank of India (RBI) Governor Raghuram Rajan has warned.

He underlined the dangers of the Chinese slowdown and its potential effects worldwide, particularly since the country had overtaken the US as the largest trading nation in 2013. But he expressed confidence that Chinese policymakers would mitigate the potential downside.

Rebounding crude oil prices, possibility of a Brexit and geopolitical risks in West Asia pose new challenges to the SAARC economies, the fastest-growing region of the world, Rajan said at a symposium in Mumbai.

“Combined with the previous bouts of leveraged expansion, China now has a number of sectors that suffer from the twin ailments of over-capacity and high leverage,” Rajan said in his inaugural speech at his inaugural speech at the SAARC Finance Governors' Symposium.

Rajan also voiced concerns on the rising bad loans of Chinese banks and weaknesses in the shadow banking system of the world's second largest economy.

“Bad loans in the banking system are likely to grow over current levels—stressed loans are estimated to be around 5.5 per cent of the bank loan book today. In addition, there may be serious weaknesses in the shadow banking system, which could feed back to banks. Clearly, cleaning up the financial system will be a challenging, but necessary task,” Rajan said.

The RBI governor who launched a massive clean-up of Indian banks' balance sheets after an asset quality review (AQR) concluded by the central bank in December, said the exposure of Asian banks, including those of India, to Chinese banks is minuscule and, therefore, they are not facing a direct threat.

“However, some of our countries, though not India, have significant borrowing from Chinese banks, and these borrowings could become costlier if Chinese banks turn inwards. Moreover, financial market losses in China can heighten the risk premia that industrial country investors will charge for investing in our region, and the result could be capital outflows of the kind that were seen last August and early this year,” he said.

Rajan said south Asian countries have to take steps to limit the impact of external uncertainties such as the next rate hike by the US Federal Reserve, a possibly sharp downturn in the Chinese economy, the proposed exit of Britain from the EU and volatile capital flows. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Ghana sets up task force to clamp down on textile piracy

Textiles | On 21st Oct 2017

Ghana sets up task force to clamp down on textile piracy

Ghana’s ministry of trade and industry has set up a taskforce to...

APTMA calls for implementation of PM’s export package

Textiles | On 21st Oct 2017

APTMA calls for implementation of PM’s export package

The All Pakistan Textiles Mills Association (APTMA) has called for...

Courtesy: Coach

Fashion | On 21st Oct 2017

US company Coach to change name to Tapestry from Oct 31

Coach Inc., a New York-based house of modern luxury accessories and...

Interviews View All

Amit Jain
Shingora Textiles Ltd

‘In terms of fabric, the fastest growing category for us is a blend of...

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Suresh P Bagrecha

Komal Texfab, founded in 1981, is into manufacturing of knitted fabrics,...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
77.9%
No
13.2%
Skip
8.8%

Total Votes: 68

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
27.9%
Skip
10.3%

Total Votes: 68

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.3%
No
10.3%
Skip
4.4%

Total Votes: 68

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
75.0%
No
11.8%
Skip
13.2%

Total Votes: 68


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search