China isn’t facing a "cataclysmic" economic slowdown and last week’s market turmoil was more about badly designed stock market circuit breakers, said Nobel-prize-winning economist Joseph Stiglitz.
The circuit breakers, which caused local exchanges to close early on two days last week after stocks plunged to a 7 percent limit, weren’t as well designed as they could be, Stiglitz, a professor at Columbia University in New York, said in a Bloomberg Television interview in Shanghai.
The market closures and lower daily fixing rates for the nation’s currency against the dollar roiled global markets, heightening anxiety that it could presage a deeper slump with growth already at a 25-year low in 2015. The Shanghai Composite Index slid again Monday, pushing its decline in 2016 to 15 percent.
"There’s always been a gap between what’s happening in the real economy and financial markets," said Stiglitz. "What’s happening in China is a slowdown by all accounts. It’s a slow process of slowing down. But it’s not a cataclysmic" slowdown.
