The sharp downturn of Chinese stock markets Monday could hurt the continuing recovery of the global economy after a 2008 recession that sunk world economies, the French minister of economy, finance and industry said Tuesday. Emmanuel Macron said international authorities needed to closely monitor China to ensure market stability worldwide.
"The world economy is recovering but not as much as we wish. It's a very long process. On the one hand, we have opportunities ... but on the other hand, there are many risks, particularly China today," Macron said in a meeting with German diplomats and journalists in Berlin, as reported by Agence France-Presse. "Over the next six to eight months, we will have a very difficult situation in China."
The Chinese stock market tumbled 8.5 percent Monday, one of the worst single-day losses in years, sending markets worldwide into a downward spiral, with the pan-European stock index FTSEurofirst 300 down 5.3 percent by the end of Monday.
While European nations like France and Germany have mostly recovered from a 2008 recession that weakened the euro and sent unemployment into the double digits, debt-ridden nations within the EU, such as Greece and Italy, have continued to struggle economically. Some analysts feared that China's flailing economy would cause similar losses in European stock markets.
Macron said Chinese and Asian markets would continue to be hit the hardest by what has been dubbed "China's Black Monday," while European economies would survive with minimal losses. The French minister said Germany, a nation that has a large trading presence with China, would be more affected than France.
"The short-term impact will not be great on the French economy," said Macron, adding that authorities needed to "remain vigilant for business that are very exposed to China" and engage in frequent Chinese trading.