1 Asia stock sell-off continues (BBC) Asian shares have opened lower again as concerns over China’s slowing growth continue to haunt investors. Chinese mainland shares have fallen more 16% since the beginning of the week, sending shockwaves through global markets.
The fall came despite Beijing’s latest efforts to boost growth and reassure traders by cutting interest rates. The People’s Bank of China cut its key lending rate by 0.25 percentage points to 4.6% in an effort to calm stock markets after two days of turmoil. It is the fifth interest rate cut since November last year.
The Nikkei’s fall on Wednesday added to an already painful week for the Tokyo index which has already shed more than 8% so far. Elsewhere in Asia, investors were equally hesitant sending Australia’s S&P/ASX 200 down by 0.5% to 5,109.90 while South Korea’s Kospi index was flat.
Overnight, European and US markets saw another session of volatile trading. Wall Street’s Dow Jones closed 1.3% down, marking the sixth consecutive day of falls for US stocks. London’s FTSE 100 index closed up 3%. Major markets in France and Germany both gained more than 4%.
2 China 2015: Beware the links with 1929 (Larry Elliott in The Guardian) On day one the stock market fell by 13%. On day two it fell by a further 12%. On day three hopes were high the storm had blown over after equity prices recouped the previous session’s losses. Let this be a cautionary tale. These figures relate not to the Shanghai Composite index in August 2015 but the Dow Jones Industrial Average in October 1929.
Even in the most savage bear markets prices never fall in a straight line. Instead, within a downward trend big daily falls are punctuated by sizeable daily rallies. Events of the past few days conform to this pattern, at least in Europe. Shares in London, Frankfurt and Paris fell heavily on Friday and Monday, then recovered on Tuesday.
For a good while, there was every indication that New York would follow the same pattern. The Dow Jones Industrial Average was up more than 400 points at one stage only to suffer a bout of jitters in the last hour of trading to close more than 200 points lower.
This is a bad omen. Markets were not over-impressed when China hit the panic button by both cutting interest rates and allowing banks to lend more money. Wall Street’s late loss of nerve suggests there is a lot more turbulence to come, with attention firmly focused on China. It is not just that the growth rate of the world’s second biggest economy is faltering, it is that the quality of that growth is deteriorating.
Mike Riddell of M&G notes that the share of gross domestic product accounted for by investment rose from just over 40% in 2007, to 48% between 2008 and 2013, to 54% last year. A higher investment rate is normally associated with higher growth; in China’s case it has been associated with lower growth.
Riddell’s conclusion is that much of the investment has been wasteful and that China is “trying to hit unsustainably high GDP growth rates by generating bigger and bigger credit and investment bubbles”.
3 Indian, Muslim and female (Rafia Zakaria in Dawn) Amid all the hubbub over talks between India and Pakistan, news emerged last week about a survey done by the Indian Muslim women’s rights organisation Bharatiya Muslim Mahila Andolan (BMMA). The survey revealed that over 90pc of Indian Muslim women surveyed want a ban on polygamy, oral talaq (divorce) and child marriage.
The results of the survey have since spurred a debate regarding the need for the reform of personal status laws that currently govern marriage and divorce for Indian Muslim women. Like so much else that ails the contemporary subcontinent, the personal status laws originated in the British era.
Under the veneer of their attempts at equal treatment, the British ensured that Hindus and Muslims, now governed by the laws that they had codified, would, in the years to come, begin to believe that religious difference was something crucial, never to be transcended. The Indian Muslim woman living in the now, however, cannot sate herself with the colonial origins of inhabiting the uncomfortable position of being a minority within a minority.
Surveys like the one produced by BMMA reveal the depth of the conundrum they face. The complexity of the situation should not, however, deter Indian Muslim women from either action or advocacy. Indian Muslims have the opportunity to lead change from within, championing the empowerment of their own women without state intervention.
The point is simple: If Indian Muslims — like British Muslims or American Muslims — dislike state intervention in matters of religious law, they must create and enact processes that promote the empowerment of Muslim women within their communities.