The chamber prepared its paper mapping the global financial situation based on inputs from its overseas offices in the US, Europe and South East Asia.
Multi-national corporations from India, the US and Singapore are worried much more about the underlying problems of the Chinese economy and their impact on the world financial and commodity markets than the Greece crisis, according to an Assocham report.
As the Chinese economy is much more entrenched with the global financial and commodity markets, slowdown in it can cause a much bigger spiral effect than Greece crisis and its collateral impact, the analysis by the chamber found.
"Since China is the second largest trading partner for both Europe and the United States, it goes without saying that any issue with the health of the Chinese economy is not good news for rest of the world. The global commodity firms in steel, copper, iron ore, crude oil have seen a sharp erosion in their margins and the revenues," the paper noted.
The chamber prepared its paper mapping the global financial situation based on inputs from its overseas offices in the US, Europe and South East Asia.
It said the spiral impact is immediately seen in the overall capital expenditures by the global corporations and investments worth several hundred billions is drying in the commodity space.
On the other hand, servicing existing debt has become an issue along with the collateral damages being felt on the corporations, both in the public and private sector, engaged in infrastructure like ports, shipping, railways and roads.
"India, too is affected as some of the big firms which had announced mega investments in the steel, aluminium, copper and other metals, are revisiting their plans in the wake of sharp erosion in demand, prices and profitability," it said.
It said the scenario would get worse if China finds itself into further problems.
"There would also be impact on the financial markets if any more instability is seen in the Chinese markets as was witnessed for a few weeks since June 12 until the government stepped in major controls," Assocham Secretary General D S Rawat said.
The severity of the domino, if it takes place, could be gauged by the fact that US banks have nearly ten times as much exposure to China than Greece, he said.
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