News in brief: China, stock market, subsidies, farming

News in brief
News in brief

International investors advised against knee-jerk reactions to China’s stock market

China’s seesawing stock market will provide important buying opportunities for investors and could ultimately assist the global economy, according to deVere Group CEO and founder Nigel Green.

Green is speaking out after China allowed the biggest fall in the Yuan in five months in early January, which resulted in global stock markets tumbling due to investor concerns that this might prompt a currency war and that Chinese growth is slowing faster than previously thought.

The DeVere CEO commented: “The devaluation of the Yuan on Thursday got financial markets worldwide in a tail spin. However, China’s seesawing market needs to be put into perspective. The global sell-off this week was excessive and a knee-jerk reaction.”

Global investors should be focusing on the Chinese economy rather than the Chinese stock market, as the direct international effect of falling share prices in China is small, says Green.

Subsidies on farming exports abolished

Following a World Trade Organisation (WTO) Ministerial Conference in Nairobi, it was agreed that subsidies on farming exports are to be abolished. Developed countries will stop them immediately, while developing nations will be given until the end of 2018.

Commenting on the agreement, Socialist and Democrats MEP Inmaculada Rodríguez-Piñero Fernández said: "We wanted an agreement that took into account the development and economic weight of the countries involved. Trade can bring huge benefits to developing countries and removing agriculture export subsidies will help farmers in poorer countries to compete more fairly.”

However, Fernández also highlighted that developing countries are not all equal and countries whose economies have grown significantly in recent years should be expected to play a bigger role in global development projects.