In the last month we saw the effect of China devaluing its currency which resulted in international money exiting their stock market. Quick measures were taken to correct market confidence which seemed to have worked.
China does need to increase GDP as it's losing market share to other countries. Although they tried to stop a run on the stock market which they achieve this will not matter if the country loses market share. The impact from losing market share will be greater than a stock market crash.
End Game
Markets will continue to look for emerging economies and this will have the effect of taking trade away from China as they no longer become the preferred manufacturing base.
China will then start devaluing its currency and result in a currency war. This will effect world trade and cause a depression. The evidence now is china trying to gain control of international waters to control trade routes.
Many third world countries have welcomed Chinas investment and they might become unofficial Chinese states.
This will eventually give China political domination over world trade.
I spoke to a compliance officer for an Australian mining company. China wanted to import Chinese workers to Australia and build a 200 person mortuary next to the mine. They work their workers to death.
