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China Contagion Threatens to Derail World’s Emerging Markets

  • Rally in commodity currencies stalls after Covid outbreaks
  • Stocks, currencies witness sharpest selloff in two years
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WATCH: China Maintains Covid Fight as Lockdowns Pummel Economy

Source: Bloomberg

Updated on

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 outbreaks -- and the government’s stringent policy to contain them -- 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 that relies heavily on trade with the world’s second-biggest economy.