The first sign of Chinese tightening on foreign investment laws, worker human rights issues and hyperinflation control is making stock markets scared
Joe Weinman
Mar. 2, 2007

What is happening China behind the scene will be the root cause of a systematic drop in Dow and other indices worldwide. It will also cause the crash in metals markets especially copper and steel.

Chinese leaders are bringing laws next week that would end tax breaks for overseas companies, strengthen labor rights, restrict monopolies and protect private property.

That is clearly bearish for worldwide stock markets. The ripple effect in the Chinese export based and foreign investment driven economies is very serious. The echo is already manifesting in the Wall Street and other global economies.

The labor right issues are big concern in China. In India and China, politicians and leaders cannot survive the growing gap between the rich and the poor? China and India are in the process of reversing the debt driven foreign investment focused growth at the cost of human rights abuse to native workers.

What that will do in due course in to sharply reduce their GDP growth. The ripple effect in conjunction with real estate problems, manufacturing slowdown and budget deficit in general is causing severe deflation (although stealth officially) in the Western economies especially in United States.

The world stock markets are scared to even think about the long-term effects.

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