Rajeev Dhawan, director of the Economic Forecasting Center of the J. Mack Robinson College of Business at Georgia State University, said that because of the Chinese stock markets鈥� fall and lower growth prospects, the repercussions have started to show up in markets for raw resources like oil, aluminum and iron ore, and will go further down the line into copper and food commodities.
鈥淐hina is now, de facto, the factory of the world,鈥� he explained. 鈥淲hen China is not doing well, its suppliers in Asia 鈥� Korea, Japan, Malaysia, Singapore, in the emerging economies of Brazil, Argentina, and Chile, along with Australia 鈥� they don鈥檛 do very well.鈥�
The ripple effects of China鈥檚 economic problems will spread globally, eventually affecting the United States. But these problems won鈥檛 push the U.S. into a recession, Dhawan said.
鈥淭his is all about the growth prospects 6 to 9 months from now,鈥� he explained. 鈥淭hese things don鈥檛 happen very quickly.鈥�
With Greece, by the end of the July 11-12 weekend, we should know one way or the other as to whether the struggling country will drop out of the Eurozone, Dhawan said. And if it does, there could actually be a positive effect on the U.S. economy.
鈥淥ur markets are not going to get rattled by the Greek debt issue,鈥� he said. 鈥淚n fact, in Europe, there鈥檚 going to be a 鈥榝light-to-safety鈥� phenomenon that will happen. Both the German bonds as well as the U.S. bonds will benefit, which means that the interest rates will be lower over here.鈥�
For more about the Economic Forecasting Center, visit , as well as on Twitter at @efc_gsu. You can also follow the center on Facebook at .
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