In China, real GDP grew 7.6 per cent in the second quarter, its slowest pace in three years, and recent data suggest continued softening in the third quarter. The slowdown in China’s growth reflects two broad influences. First, external demand for China’s exports has weakened, owing in particular to the recession in Europe, China’s largest trading partner.
Just to mention a recent example, the collective actions among central banks to facilitate liquidity provision in short-term money markets were an important initiative in this sense. But to what extent does increasing financial globalization affect the efficiency and stability of asset prices and economic performance in general?