When China sneezes. . .

This isn’t of course, a reference to flu pandemic worries, but rather to  Tuesday’s dramatic stock market sell-off.

If anyone needs any further evidence of the globalization of business and economies, it’s right there in stock market analysts’ assessment that Tuesday’s 3.3% drop in the Dow Jones Industrial Average had its start in a 9% drop in the Shanghai stock market earlier in the day.

Preceding the downturn in the Dow was a rolling wave of stock market losses that made its way west with the sun from China after Tuesday’s market close in Shanghai.

Of course, what the title of this post does make reference to is the once popular saying that “When General Motors sneezes, the whole country catches a cold.” As it turns out, another item in today’s business news addresses Toyota’s announcement of plans to build a new $1.3 billion auto plant in Mississippi, and the fact that the Japanese automaker likely will overtake GM this year as the  world’s largest car manufacturer.

 The insurance business has been a global business for quite some time, and industry interest in emerging markets like China and India show it will become even more so.  A global marketplace offers a world of opportunities, though attempts to tap them obviously must involve careful scrutiny of the local risks inherent in various markets.


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