China's economy slowdown a threat to world economy: Raghuram Rajan
China's economy slowdown a threat to world economy: Raghuram Rajan
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RBI governor, Raghuram Rajan in a speech to central bank governors from the nations of the South Asian Association for Regional Cooperation ( SAARC) grouping, said that China slowdown is a great threat to the world economy.

RBI said that Rajan has warned that a "sharp" slowdown in China's growth was a threat to the global economy, highlighting possible impact from the shadow banking system of its neighbour.

According to RBI, he summarized on China saying "Bad loans in the banking system were likely to grow over current levels, and, in addition, there might be serious weaknesses in the shadow banking system, which could feed back to banks.Both could be significant downside risks as they could have second round effects for SAARC economies. Chinese growth would depend not just on its policies, but also on growth elsewhere in the world."

He added that a "sharp" slowdown of the Chinese economy "still remained a significant risk for the global economy and the SAARC region."

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