When Shanghai Sneezes

With investors around the world reacting nervously to the continuing collapse in the Chinese stock markets, what happens to shares in Shanghai matters a good deal to people living in Sheffield. And the effects are likely to be unfavourable, in the short term at least.

In the most direct terms, many British pension funds now have at least some of their portfolios invested in emerging markets, and all have had a torrid time of it in recent months. Of the so-called Bric nations, Brazil has long since lost its appeal, Russia has been avoided because of wars and sanctions, and China has come up against the inevitable consequences of a young stock market dominated by individual private investors and adventurous foreigners gripped by the "search for yield". Only India has managed to retain its composure, underpinned by an apparently reforming government and the abiding advantages of the rule of law, democracy and the English language.

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