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WEF highlights Chinese slump as biggest risk to global economy

Discussion in 'The Economy' started by Tropo, 14th Jan, 2009.

  1. Tropo

    Tropo Well-Known Member

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  2. Chris C

    Chris C Well-Known Member

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    The notion that China was begin to decouple from developed economies would appear to be well short of reality, and that the Chinese middle class is still well short of being able to support the economy on its own.

    I think most of the projections about China's slowing in growth will be much worse than is even being reported now.

    What's worse is that there looks like there isn't a lot of light at the end of the tunnel for China either, with most expecting that at the end of this deep recession renewed focus will be placed on living within one's means, likely to suggest increase saving rates and slower eceonomic growth in deveoped which will translate in slower Chinese growth which is heavilt dependant on exports.

    My only hope is that China can overt major civil unrest.
     
  3. samaka

    samaka Well-Known Member

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    It certainly seems from my point of view that the current (or recently passed) Chinese growth has/was been built on top of the recent worldwide boom.

    I think a lot of what now constitutes the middle class in China has evolved from those outside factors - not within - which is why the de-coupling theory never panned out.

    However from now I think it can truely start. The Chinese people want to move up to the middle class. They're now aware of it and aspire to it. The measures that the government will put in place from now on in will have to centre around fuelling their economy for there own sake (as to oppose to relying on other countries).

    The current middle class probably can't support Chinese growth - however what they do from now will probably be designed around creating that support.
     
  4. Chris C

    Chris C Well-Known Member

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    No doubt. Though China won't be the savour of this global recession like it hoped it might be.

    That said I still think China has a pretty bright future (one that Australia and the world would love to piggyback off) if the present Chinese government can manage to hold things together for the next 18 - 24 months, though that is becoming an increasingly bigger "if"...