CHINA CRISIS AND

IT’S IMPACT ON INDIA

What is crisis ?Definition:-Critical event or point of decision which ,if not handled in an appropriate and timely manner (or if not handled at all), may turn into a disaster or catastrophe or havoc destruction.

Meaning :-An unstable situation of extreme danger or difficulty. In other words a crucial stage or turning point in course of something making the decision.

Few past financial crisis in china… What is financial crisis ??? The term financial crisis is applied when a situation by which some financial assets suddenly lose a large part of their nominal value.

Some of the financial crisis held before are as follows:-1) LATAM SOVEREIGN DEBT CRISIS – 19822) SAVINGS AND LOAN CRISIS – 1980’s3) STOCK MARKET CRASH (BLACK MONDAY) – 19874) CHINA CRISIS 2008

Why china hit the crisis ?Main reasons which left china with crisis :Tremendously Diminishing of exports in china after 2008.Large production of goods by manufacturers left unsold…Production percentage 40 to 50 decreased due to lack of demand for goods.GDP growth rate diminished from 8 % to 7% & below.Dumping of printed currency in to the market without any calculations.Income levels came down and unemployment started Increasing. Consumption of china goods decreased in European and Asian countries.China’s real estate and infrastructure sector got collapsed. China got a break for its last 30 years growth and development.

What has happened in China?More than $5 trillions has been wiped off the value of global equities markets since china stock devaluation.2015 june onwards shangai stock market started collapsing.8.5% down in shangai composite Index in stock market.5.2% down in hong kong hang seng closing at 21,252 points.Tapai stocks tumbled to 7.49% which closed by 7,203 points.

AFTER CRISISChina unexpectedly devalued its currency .Devaluation of 3.6% currency value compared to US Dollar.Market of china slumped down to 8.45% .Lump sum Printed currency dumped into the market .Excess production of commodities led china into crisis. Over expectation of returns by investors left with loses in china which led to CRISIS.Deflation, deflation & deflation….

Black Monday 24 Aug 2015

Impact of black Monday on world nationsUNITED NATIONS STOCK MARKET :Dow Jones :- Biggest faller down 1.93% closed at 16,140 points.S&P 500 index :- Fall of 1.49% closed at 1,941 points Nasdaq :- It is down 1.8% closed at 4,621 points. UK STOCK MARKET :Financial times stock exchange (FTSE)100 Index down by 289 points 74 Billion Euros was wiped out in LondonEuropean stock market suffered their worst trading since 2011Australia’s stock market suffered its biggest fall since 2009 ASX200 in Australia fell 2.4% Japan’s Nikkei slumped over 4% Investments of investors in Indian stock markets melted like ever since before on black Monday .

How china crisis effected India? Within hours Rs7 lakh crores wiped out in BSE.China crisis led Indian market crashing on Monday by 5.94 per cent or 1,624 points ,closing at25,741 points.Nifty at NSE fell 5.9 per cent to close at 7,809 on Monday. The sell-off shares also saw the rupee decline to a new two-year low of Rs.66.65

China Market melt down can impact India in five ways

GOOD FOR SMART CITIES .GOOD FOR DEFICIT AND INFLATION MANAGEMENT .BAD FOR AUTOMOBILE PRODUCERS.GOLD MIGHT GLITTER.MOBILES CAN BE CHEAPER. India is a fairly stable economy; so the boat will rock, but won't overturn. If all goes well, India should achieve 7.5 per cent GDP growth in 2015-16 - “ARUN JAITLEY.”

BREAKAGE OF CHINA CRISIS AFFECTED INDIA IN MANY WAYS

every year India imports 60 billion dollars from china.Every year India exports 11 billion dollars to china. 49 Billion dollars lose were disclosed between India and China due to crisisAS FOR THIS CHINA CRISIS WILL AFFECT INDIA?India as an Importer country it is under safe zone.But the results of china crisis can be based by India or Not, is a Question Mark.So these crisis may result in positive and negative, positive may leads to growth and negative can impact the Economy.

ARE WE READY TO FACE THE CHINA’S IMPACT

India has to takeover the Chinas production but the cost of raw materials, cost of machines, weakness of currency . So couldn’t be able to decide due to unwilling culture of Indians is a Question for us.This happens when chance is given but it fails when it does not follow. If this has to happen the government must be actively react with the advantages given to perform the tasks.Income level of china is five times more than India, so this should be taken as consideration.Our PM NARENDRA MODI announced that our currency rate will be equal to foreign currency next year.If that situation comes Indian Investors are to be gathered than the growth rate of India will be successful .

RAJIV BISWAS, SENIOR DIRECTOR AND ASIA PACIFIC CHIEF ECONOMIST AT HIS , A CONSULTANCY :-

“If India can continue to pursue economic refers and boost infrastructure investment, it has potential to grow

at 7% to 8% per year for a sustained period.”ARUNDHATI BHATTARCHARYA SAID THAT -“The current strain of rupee is triggered by global issues as there are some amount of apprehension as to where china is going. Obviously it’ll take a little time before we get the floor.”“it will depend on how other nations handle their central banks are reacting to it.” “Rupee value has to continuously decrease so that exports will increase and there should be restriction on Imports.”

THANK YOU

PRESENTED BY,CH.KANAKA RAJU.

(MBA Finance)