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China slowdown threatens the global economy

Raghuram Rajan, India’s central bank governor, has warned that this abrupt slowdown in China’s economy actually threatens the global economy. He drew attention to the probable impact from the shadow banking system of China.   

Rajan's comments arose in India's financial capital during Thursday’s speech to major bank chiefs from the nations of the South Asian Association for Regional Cooperation grouping, as the RBI states.

Bad loans within the banking system were about to surge over current values and and, there might be crucial weak points in the shadow banking system, that could get back to financial institutions.

There could be considerable downside risks because they could boast second round effects for SAARC economies. Evidently Chinese growth would be tied not only to the country’s policies, but also to growth elsewhere around the globe.

The RBI governor previously pointed out to the potential overflow effect from Chinese economy to other countries. 

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