Chinese diplomats are none too chipper about Brexit.
Yesterday, China's Finance Minister Lou Jiwei warned that though the consequences of the June 23 referendum were unclear, they would surely be felt for years to come. Brexit will "cast a shadow over the global economy," Lou said, according to the BBC.
Huang Yiping, a member of China's central bank monetary policy committee, issued a warning of his own regarding the British vote.
He claimed it could mark a "reversal of globalization" that would be "very bad" for the world.
Very bad indeed. Already China's economic reaction to Brexit has put the globe at risk…
China's Economy Takes a Hit from Brexit
Chinese stocks fell more than 1% last Friday as Britain's vote shocked its financial markets. The Shanghai Composite Index dropped from 2,854 to 2,840, but stopped there as the country's tight capital controls curbed heavier damage. Still, on Monday, the People's Bank of China devalued the yuan at 6.6375 to the dollar. That's a 0.91% drop from Friday's fixing — and the largest fall since August 2015's surprise devaluation that shook markets worldwide.
Financial institutions are likewise scaring investors about the referendum's effect on the Red Dragon.
After the vote results were revealed last week, Barclays Plc. (NYSE: BCS) stated it thinks the Brexit will burn a tenth of a point off Chinese GDP in 2016 and 2017.
That same day, Goldman Sachs Group Inc. (NYSE: GS) said that a weakening yuan will make it much harder for China to stem capital outflow, which was, between January and May of this year, up to $175 billion already.
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