China’s Economic Woes may Boost Economic Ties with India

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IF CHINA SNEEZES, THE world catches a cold, many have come to believe in recent years.
Of late, however, the cold may well have turned into a raging fever over the conse¬quences of the crash of the stock exchange in Shanghai, China’s financial hub.
Symptoms of a malaise in the Chinese economy, the world’s second largest after the US, flared into the open when the Shanghai exchange began plunging from June-July, and it assumed seismic proportions by August, sending equity markets across the globe into a tailspin. Adding to the confusion was a sharp devaluation of the yuan, also in August. Both developments have spread panic across the world’s stock and currency markets. Though wholly not unexpected, they have also raised troubling and fundamental questions about the Chinese economy and its management.

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