USM professor: Chinese market plunge to have minimal impact on American market

HATTIESBURG, MS (WDAM) - A professor at the University of Southern Mississippi believes the recent plunge in Chinese stocks will have little impact on American financial markets.

Stock prices in China have plummeted more than 30 percent in the last few weeks, resulting in $3 trillion in stock value lost.

The volatility in the Chinese markets probably won't effect American markets much, according to Edward Sayre, associate professor of economics at USM.

"I wouldn't expect any more than a one or two percent effect on the U.S. markets," said Sayre. "And that's something we could absorb in any given week."

Sayre also said he expects some additional volatility before the Chinese markets are able to correct themselves.

"There's been a Chinese 'bubble,' and it's going to sort itself out," said Sayre. "They may be at 70 percent of their current levels for the next few years, but it's not something where you're going to see a long-term depression or recession, really."

Sayre is also chair of the Dept. of Political Science at Southern Miss.