China's weak economic indicators can lead to next global crisis

Baku. 16 November. REPORT.AZ/ The slowdown in lending in the Chinese economy will have a gradual impact on global financial markets, especially on raw materials prices.

Report informs citing the Vestifinance.ru, volume of new loans in China in October amounted to 1.04 trillion yuans ($ 159 billion). This is 9,5% less than forecasted 1.1 trillion. yuans ($ 170 billion) and also by 44,5% less than the volume of lending in the amount of 1.8 trillion yuans ($ 271.5 billion).

Meanwhile, the volume of M2 money supply in China has shown 8,8% growth compared to the previous year and declined to multi-year minimum. Investments in fixed assets increased by 7.3% year-on-year and amounted to the lowest level of growth in the last 18 years. Also the decline in China's construction industry was also recorded. Thus, the construction of residential areas in October decreased by 3.6% in an annual comparison.

Construction of residential, commercial and office buildings which are the most significant factors affecting prediction of global raw materials prices, slowed down and grew by 5.6% year-on-year, which is the lowest since last quarter of 2015.

As a result, China's "AAA" 3-year bonds yield increased by 36 basis points over the past 3 weeks and 45 basis points since early October, reaching the maximum for past three years.

Analysts said that the slowdown in Chinese economy has a direct impact on the global economy and global financial markets. The slowdown in China has a negative impact on raw materials, especially oil prices.So, China is currently the world's leading oil importer and its daily oil imports are close to 9 million. barrels. Any deceleration in China is likely to diminish oil prices, and then jump to global financial markets.