China Attempts to Boost Global Economy
The People’s Bank of China has moved to relax legislation surrounding banks’ cash reserves in an economic design that plans to make cheaper loans available, according to the Guardian.
With the global economy stuttering, the shipping industry has countenanced serious problems with rampant overcapacity.
In order for global trade to gain momentum, demand has to increase and China is aiming to manufacture such growth, such is its power.
China suffered a major economic crash in 2015 that was mainly felt domestically, although the impact of the crash has affected buying power, which has in turn impacted demand in the bulk markets.
The Baltic Dry Index, an indicator for trade levels in bulk markets across the world, has hit historic lows recently, in another industry beleaguered by overcapacity.
There have now been six interest rate cuts in China since November 2014, with Beijing resorting to a variety of new methods to try and encourage growth.
The current global economic situation has been eye-opening for many reasons; not least the impact low demand from China creates, yet with an unpredictable global market, fears of a second recession had begun to mount.
However, 2016 has seen some green shoots, and talk of recession has seemingly subsided for now, yet not nearly enough demand is present in the market to justify the swathes of overcapacity in the shipping industry.