Chinese economy which is composed primarily of production and export definitely has grown in recent years and has created the middle class, which is considered to be the mainstay of a healthy state. There is reason to believe that its ranks will soon be replenished, as from provincial areas of the country young people flock in Beijing, ready to endure the hardships of city life and to live in the so-called Ant Tribes in order to eventually open their own business, gain financial independence and help with money relatives remaining in the villages and small towns. In this case, if future Chinese business sharks decide to spend their income not to improve living conditions and education, buy electronics and cars but to put it in the growth, the choice of investment instruments available will be very small.
They can only buy stocks or real estate, with much risk of losing their money if financial bubble in these areas ever burst. The memories are still fresh about collapse happened in the Chinese stock market in July and August 2015, which by all logic should have happened inevitably given the fact this sector was overheated with investor`s money, but it seemed quite an unreal threat. Perhaps wanting to avoid the further development of the stock market bearish trend, the Chinese government began to put down the excitement of the short sellers, that is why the rule of automatic stop of all trading on stock exchanges in the country was introduced in the event when the shares drop by seven percent.
At the same time the incredible growth of the Chinese real estate market gave rise to a unique phenomenon in the history of people - the emergence of tens, and according to some estimates of hundreds of so-called ghost cities, built by office centers and residential skyscrapers, where no one works and lives. The fact that huge prices for apartments in cities may collapse at any moment to the ground not meeting effective demand, which is clearly not observed, is not hard to guess.
It is also easy to predict that the development of China's economic recession caused by the crisis of export production model and freeze of big money in the uninhabited cities, will inevitably lead to the decline of the extractive industries in the countries that supply raw materials to China for its epic construction and industrial projects. And this dangerous trend threatening for example Australian economy has already been observed, which is why in the north of China empty and idle metallurgical plants can be seen, and former workers are doing odd jobs, which are not easy to find in these depressed regions.
Europe meets the 2017th year not at its best place, as today it is suffering not only from terrorist attacks, but also from the difficult situation in the PIIGS block consisting of Portugal, Ireland, Italy, Greece and Spain. After a number of saving measures taken by the European Union and the IMF, these countries have austerity, which is obviously not conducive to the growth of consumer demand there and did not find approval among the population. This situation is particularly difficult for Greeks, who eventually rejected restrictions imposed on spending and gave rise to a tendency of leaving the euro-zone.
This tendency may well spread to other countries, that eventually can lead the euro currency to be abolished. About the structural weakness of euro, fraught with its cancellation, the US hedge-fund giant John Paulson expressed his opinion long time ago. He earned really a lot in the crushing collapse of the US residential mortgage for which reason he got the nickname of "mortgage marauder." Apparently, his subtle sense did not deceive with regard to the European currency, which looked very doubtful at the end of 2016 year.