China’s recent troubles have, and will continue to have, a serious impact on the global economy and equities.

The effects of the Hong Kong protests have so far been constrained to Hong Kong and its economy. However, the damage to the financial hub’s real estate market has already been done.

Beijing currently has a lot on its plate. The trade war, combined with the recent unrest in Hong Kong, leaves the Chinese leadership dealing with problems both domestic and global. The challenge that Beijing’s current struggles represent are related to the underappreciated role that China plays in the international financial system.

First of all, China plays a huge role in global equities. China makes up one third of the world’s emerging markets’ equities indexes, presenting a risk to equities in emerging markets, which should now be viewed with extra caution. The second factor is the role that China plays in the global economy. Simply put, China is a giant. China is the world’s second largest economy and is the leading driver of global economic growth. As the Chinese economy slows, sectors that are cyclical in nature are especially vulnerable. The Chinese economic slowdown has already affected the price of commodities, which has hurt several of the world’s economies.

In Hong Kong, six weeks of massive protests are taking their toll. According to CNN, about $56.9 billion has been taken off the market value of Hong Kong real estate stocks amid the protests. The Hang Seng properties index has fallen 19% since a recent high in April. The broader index has fallen 16% during the same time, and now both are at risk of entering a bear market.