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When China's economy suffers, so does ours

Aug 25, 2015

Credit flickr user Osrin / http://j.mp/1SPGCl0

    

It has been a wild ride on Wall Street this week and it's only Tuesday.

On Monday, the Dow plummeted more than 1,000 points before closing the day down 3.6%.

Today, investors were in a buying mood and the Dow went up. 

One of the big drivers of this market instability is China's plunging stock market.

It's a stark reminder that China's economic well-being, or the lack thereof, can have a mighty big impact on the bottom lines of companies here in the U.S.

Reporter Nathan Bomey wrote this piece for USA Today: "What's bad for China is bad for U.S."

“That’s because there are so many global companies now that really depend on profits out of China, and so they have American headquarters and they feel the pain,” said Bomey.

Meanwhile, Gov. Rick Snyder is in China on his fifth trade mission. Snyder believes there will be more trade and investment with China, but should salute that or feel somewhat wary?

Bomey points to Ford Motor Company and General Motors as easy examples of companies that are benefiting from sales in China, but he says there are smaller companies and suppliers that are also doing well.

"The global connectedness between the U.S. and China is impossible to ignore now, so I think it's going to be in Michigan's best interest to continue to draw those ties, understanding of course that there are still major trade issues, things that need to be addressed on a national level."