China is the second largest economy in the world. There used to a saying that if the United States catches a flu, the world will get sick. This analogy is now being used on China now. The fact that China is now experiencing a major economic flu can be seen in its recent market volatility. But before we dive into that, let us put the global economic conditions into context.
The largest economy in the world, the United States, is now the bright spot of the global economy. It has grown solidly to the extent where the Fed rose interest rates for the first time in more than nine years in December 2015 and the subsequent strong non-farm payroll (NFP) confirmed their positive bias.