FX.co ★ China’s economic downturn to hurt US more than some experts think

According to top economist David Rosenberg, China's tanking economy will have a bigger impact on the US than some experts think. The economist noted that the US was the largest foreign investor in China. "The Chinese economy has headed into a severe slowdown, with its economy entering deflationary terrain and the property sector remaining in crisis mode. The economic downfall will weigh negatively on the global economy, primarily through trade channels on countries with a high dependency on China," Rosenberg said. He added that the commodities trade in particular would feel the effects of China's economic problems, and countries that were top exporters of key metals were exposed. Today, total foreign direct investment in China plunged to $5 billion in the second quarter from $101 billion in the first quarter of 2022. This primarily affects the US, which is among the top five leaders in terms of foreign investment in China. Rosenberg concluded that "the companies that operate there with a view towards serving the Chinese economy are surely going to see a dampening effect on their worldwide profits and from that indirect effect, end up having negative repercussions for the stock market."