China's economic problems directly threaten the United States

Economists warn that the sluggish Chinese economy may negatively affect other countries, especially the United States, and the effect of this may be more serious than experts suggest.

Such a strong influence on the American economy is explained by the fact that the United States is the largest foreign investor in China.

Analysts note that the Chinese economy is currently in a serious slowdown and even deflation, and the real estate sector continues to experience a crisis. An economic downturn in China could have a negative impact on the global economy, especially through trade ties with countries heavily dependent on China. 

Today, many countries will be able to feel the effects of economic difficulties in China, especially those that are the largest exporters of important metals such as copper and iron. This applies to Chile, Australia and Peru: these countries will be the first to feel the negative effects of the recession.

Investors from abroad have already reduced their investments in China to $5 billion in the second quarter, compared with $101 billion in the first quarter of 2022. This is especially true of the United States, which is among the leaders in terms of foreign direct investment in China. According to economists, companies that depend on the Chinese economy and serve it (as well as the rest of Asia) will face a limiting effect, which, in the end, may negatively affect the entire stock market.