The world's two biggest economies are trying to rework their tangled relationship... As turbulence shakes markets, experts suggest sitting tight...
US and China rework economic ties
WASHINGTON (AP) — The United States and China can't go on this way.
As President Barack Obama meets President Xi Jinping in Washington this week, the world's two biggest economies are trying to rework their tangled relationship as partners and rivals — the frenemies of the globalized marketplace.
What's transforming their ties is the end of two decades-plus of super-charged growth in China. A slowdown carries far-reaching consequences for countries and companies that have supplied it — from Chilean copper mines and Indonesian rubber plantations to equipment manufacturers like Ingersoll-Rand in the United States and Komatsu in Japan.
Concern about a decelerating China — which last year accounted for nearly a third of global economic growth — was a key reason the Federal Reserve decided last week to delay a long-awaited increase in short-term U.S. interest rates.
For four straight years, China's economy has slowed and almost surely is decelerating again this year. The International Monetary Fund expects China's gross domestic product to expand 6.8 percent in 2015 — fast by normal standards but the slowest for China since 1990. Many economists suspect that growth is even slower, perhaps below 6 percent.
China's economy isn't just slowing. It's also begun a vast transformation. Beijing is trying to shift the economy away from unsustainable dependence on exports and often-wasteful investment in factories, real estate and infrastructure such as railways and airports. In its place it envisions a new economy — slower-growing but steadier — on a foundation of spending by China's consumers.
As turbulence shakes markets, experts suggest sitting tight
NEW YORK (AP) — Whenever disaster strikes people run for safety. They race outside when a house catches fire and head to the basement when a tornado tears through town.
And when the stock market takes a sudden fall, they sell stocks and hide the money in cash.
That's the move plenty of people have made since markets went wild this summer, and the ongoing turbulence has tested average investors' ability to stick with their financial plans. It's a natural response to flee in the face of danger, except that when it comes to investing, it's usually the wrong one.
"The only person who gets injured on the roller coaster is the person who tries to jump off in the middle of the ride," said Rob Austin, director of retirement research at Aon Hewitt, a human-resources consulting firm.
When worries about the global economy started shaking Wall Street last month, organizations that track the actions of average investors spotted a surge of money flowing out of the market and into cash. Average investors pulled a net $9.8 billion out of mutual funds targeting U.S. stocks and put $9 billion in the money market during the week ending August 26, according to the Investment Company Institute, a trade group. This month, some of them seem to be taking their cues from the market's weekly swings -- money creeps into U.S. funds one week and gets pulled the next.
WASHINGTON (AP) — The United States and China can't go on this way.
As President Barack Obama meets President Xi Jinping in Washington this week, the world's two biggest economies are trying to rework their tangled relationship as partners and rivals — the frenemies of the globalized marketplace.
What's transforming their ties is the end of two decades-plus of super-charged growth in China. A slowdown carries far-reaching consequences for countries and companies that have supplied it — from Chilean copper mines and Indonesian rubber plantations to equipment manufacturers like Ingersoll-Rand in the United States and Komatsu in Japan.
Concern about a decelerating China — which last year accounted for nearly a third of global economic growth — was a key reason the Federal Reserve decided last week to delay a long-awaited increase in short-term U.S. interest rates.
For four straight years, China's economy has slowed and almost surely is decelerating again this year. The International Monetary Fund expects China's gross domestic product to expand 6.8 percent in 2015 — fast by normal standards but the slowest for China since 1990. Many economists suspect that growth is even slower, perhaps below 6 percent.
China's economy isn't just slowing. It's also begun a vast transformation. Beijing is trying to shift the economy away from unsustainable dependence on exports and often-wasteful investment in factories, real estate and infrastructure such as railways and airports. In its place it envisions a new economy — slower-growing but steadier — on a foundation of spending by China's consumers.
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As turbulence shakes markets, experts suggest sitting tight
NEW YORK (AP) — Whenever disaster strikes people run for safety. They race outside when a house catches fire and head to the basement when a tornado tears through town.
And when the stock market takes a sudden fall, they sell stocks and hide the money in cash.
That's the move plenty of people have made since markets went wild this summer, and the ongoing turbulence has tested average investors' ability to stick with their financial plans. It's a natural response to flee in the face of danger, except that when it comes to investing, it's usually the wrong one.
"The only person who gets injured on the roller coaster is the person who tries to jump off in the middle of the ride," said Rob Austin, director of retirement research at Aon Hewitt, a human-resources consulting firm.
When worries about the global economy started shaking Wall Street last month, organizations that track the actions of average investors spotted a surge of money flowing out of the market and into cash. Average investors pulled a net $9.8 billion out of mutual funds targeting U.S. stocks and put $9 billion in the money market during the week ending August 26, according to the Investment Company Institute, a trade group. This month, some of them seem to be taking their cues from the market's weekly swings -- money creeps into U.S. funds one week and gets pulled the next.
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