China is not the only problem for the global economy

At least for now, there are five major factors interacting: a slowdown in the Chinese economy, falling oil prices, terrorism stemming from the turmoil in the Middle East, a strong US dollar, and an increase in domestic interest rates.

Yet the slowdown in the Chinese economy is the worst news for the rest of the world. China has been the largest contributor to global economic growth for a decade. But the plus 10 percent growth rate has now slowed, nominally to 6.7 percent, but probably closer to 5 percent, and maybe even less, after 25 years of wild growth.

Of course, compared to the US growth rate of about 2 percent, that still sounds very good. The problem is that many other economies are growing even more slowly, or even shrinking. It is China's economic growth that has helped global growth in the past.

The slowdown in China means that their appetite for global goods and services will drop. So the domino effect has affected other economies like Australia, which supplies iron ore, coal, copper and other commodities to China.

Meanwhile, the Chinese are deliberately trying to slow things down as they try to migrate from the export economy towards increasing domestic consumption oriented towards the economy. But they are afraid that they are slowing down too quickly. So they devalued their currency to make their goods cheaper and help exports, at least temporarily.

Compounding China's problems is its well-built infrastructure, heavy debt burdens and a nascent stock market. Worse, the Chinese are trying to stimulate open markets, but have not learned to resist government instincts to govern in almost every direction. The resulting uncertainty has fueled nervousness among Chinese investors, leading to capital flight to more stable markets like the United States.

Fortunately, with $ 3.3 trillion in foreign exchange reserves, China can withstand significant shocks until certain things are understood. And it will happen, it just might take a while.