Why China’s Turmoil Is Good News for US Economy and Stocks

U.S. stocks have endured a lot of turmoil, but recent shocks have made apparent important facts about China and the shifting global economy.
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Why China’s Turmoil Is Good News for US Economy and Stocks
Traders on the floor of the New York Stock Exchange on Sept. 1, 2015. Spencer Platt/Getty Images
Peter Morici
Updated:

U.S. stocks have endured a lot of turmoil, but recent shocks have made apparent important facts about China and the shifting global economy long ignored by many analysts and investors. Those bode well for America, and the bull market should soon resume.

Faulty accounting standards make dicey assessing the true profitability of most publicly traded Chinese companies. Bond ratings in the Middle Kingdom, often a good first indicator of business health, are outright frauds—97 percent of Chinese companies score AA or AAA, compared with 1.4 percent for U.S. businesses.

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Peter Morici
Peter Morici
Author
Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Previously he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions including Columbia University, the Harvard Business School and Oxford University.
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