FXstreet

As it has for much of 2015, China’s soft economic underbelly will remain a core concern for the growth of the global marketplace. Indeed, the odds are that China’s economic troubles will only continue to get worse in 2016—and the events of these very first days of the new year are not a good omen. This is because Beijing has painted itself into a corner and the various policy levers it is trying to press are producing contradictory outcomes.

As a result, confidence in the Chinese leadership on the part of the country’s own citizenry remains on a downward path. This is the most critical ‘leading indicator’ the rest of the world should pay attention to–both from an economic as well as a political risk perspective.

All of this is coming to a head just as China, with much fanfare, has established both the Asian Infrastructure Investment Bank (AIIB), a regionally focused entity, and its ‘One Belt One Road’ (OBOR) trade and investment network, which is designed to help China up its geo-economic game globally in the spirit of further recreating a modern version of the ancient Silk Road. The timing for launching these initiatives may prove to be unfortunate.

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