Impact of China Stocks is Far Reaching

After years of betting on China’s booming economy and growing middle class, some Western firms may now feel the pinch as a slide in Chinese shares threatens to hurt consumer confidence in the world’s second-biggest economy.

China’s benchmark stock market, which surged more than 100 percent between October last year and June, has since shed 25 percent of its value in a violent sell-off that forced Beijing to step in with a number of supportive measures.

“The scale of the falls in share prices has raised concerns and client questions about Western companies’ exposures to China,” analysts at research firm Credit Sights said in a note published Tuesday. “Sharp falls in share prices could dent consumer spending through the wealth effect.”