Friday, September 16, 2011 – by Staff Report
China risks hard landing as global woes spread ... China's carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years. Beijing is alarmed by inflation above 6pc and price-to-income ratios for property in the rich coastal cities ... "There is a large potential risk," said Zhu Min, the deputy managing director of the International Monetary Fund and a former Chinese official. Mr Zhu said China had doubled the loan ratio from below 100pc of GDP before the Lehman crisis to roughly 200pc today. The danger is that this excess could start to unwind just as the West goes into a sharp downturn, and possibly a double-dip recession. China and emerging Asia are fundamentally in weaker shape this time, having used up their "fiscal cushions", leaving them with little leeway to cope with a fresh global shock. – UK Telegraph
Dominant Social Theme: Europe has a lot of troubles. But, hey, China's always delivered before. Perhaps it can still fix the world once it fixes itself.
Free-Market Analysis: Good on you, Ambrose Evans-Pritchard. There is really no other story that matters, is there? If China goes down, the economic system of the past 60 years may be finished. Collapsed. Kaput. That's because every other major economy in the world is troubled to a degree. China has been pulling the whole boatload. But what if China's magnificent industrial engine begins to sputter and lose traction?
If America is in a recovery, as the Obama administration claims, it's a funny one. We tend to think the American economy more or less resembles a depression. Europe's, too.
Dominant Social Theme: Europe has a lot of troubles. But, hey, China's always delivered before. Perhaps it can still fix the world once it fixes itself.
Free-Market Analysis: Good on you, Ambrose Evans-Pritchard. There is really no other story that matters, is there? If China goes down, the economic system of the past 60 years may be finished. Collapsed. Kaput. That's because every other major economy in the world is troubled to a degree. China has been pulling the whole boatload. But what if China's magnificent industrial engine begins to sputter and lose traction?
If America is in a recovery, as the Obama administration claims, it's a funny one. We tend to think the American economy more or less resembles a depression. Europe's, too.
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