“What was driving weakness in all these countries was the gradual slowdown in the Chinese economy. As China bought less steel from Brazil, iron ore from Australia (its stock market was down by 22 percent during this time frame) and less mineral fuel and oil from Indonesia, the effect on these economies was immediate.
When it comes to warning indicators from China, there are many from which to choose. One is that, according to their 2014 balance sheets, four out of five of the world’s largest banks are Chinese. Or one could choose the Chinese debt ratio, which McKinsey & Company has estimated to be over 280 percent of the country’s total economic output.”