A widespread selloff in China is rippling through emerging markets, threatening to snuff out growth and drag down everything from stocks to currencies and bonds.
Fresh COVID-19 outbreaks ¡ª and the government¡¯s stringent policy to contain them ¡ª are spooking global investors who fear shutdowns in China will echo across the world by lowering demand and disrupting supply chains. That¡¯s pushing them to sell not just China¡¯s currency, bonds and stocks but the assets of any developing nation which relies heavily on trade with the second-biggest economy.
The result is the sharpest slide in emerging markets in two years, not unlike the meltdown in 2015 when China¡¯s woes led to a rout in their bonds and currencies, besides wiping out $2 trillion from equity values. Since then, the country¡¯s influence on the global economy has only grown: It¡¯s now the largest buyer of commodities, meaning its slump may impact exporters of raw materials and their markets more than ever.
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