Ultrabear economist Nouriel Roubini, who foresaw the current crisis, warns of signs that China is in danger of falling apart economically. You have to register (free) with his site to get the whole column. Here's an excerpt:
[T]he risk of a hard landing in China is sharply rising; a deceleration in the Chinese growth rate to 7% in 2009 - just a notch above a 6% hard landing - is highly likely and an even worse outcome cannot be ruled out at this point. The global economy is already headed towards a global recession as advanced economies are all in a recession and the U.S. contraction is now dramatically accelerating. The first engine of global growth - the U.S. on the consumption side - has now already shut down. The second engine of global growth - China on the production side - is also on its way to stalling. Thus, with the two main engines of global growth now in serious trouble a global hard landing is now almost a certainty. And a hard landing in China will have severe effects on growth in emerging market economies in Asia, Africa and Latin America as Chinese demand for raw materials and intermediate inputs has been a major source of economic growth for emerging markets and commodity exporters. The sharp recent fall in commodity prices and the near collapse of the Baltic Freight index are clear signals that Chinese and global demand for commodities and industrial inputs is sharply falling. Thus, global growth - at market prices - will be close to zero in Q3 of 2008, likely negative in Q4 of 2009 and well into negative territory in 2009. So brace yourself for an ugly and protracted global economic contraction in 2009.

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My younger brother has always been suspicious of China, mostly from a political perspective. He figures that their system of government can easily become unstable, given the right circumstances. Should something like this happen, I could see the government possibly destabilizing.
Nobody better gloat about this. Any PRC hard-landing means they stop buying our T-bills, and hoo boy, are we in for it then.
well mdsf might be concerned about the non modelling nature of roubini's economics but when sports pundits decide with reasonable outcome for a sports game they also don't seem to apply too much in way of way of modelling yet the gambling organisations still seem to function.
Msdf, I'd be interested in seeing some formulae for predicting the economic effects of an instantaneous loss of a job on part of the population. Seems like this might be having an effect at the moment. Maybe it just easier to look at interest rates.
Even so, who would reckon that steady state modelling works too well with unsteady state systems especially when no one even understands the steady state condition too well.
We need a visit by a relative of Maynard Keynes with some expertise in dynamics, having majored in the effects of ignorance on the population of analysts.
Thanks, Bernard King
So is Roubini still "predicting" China is falling apart? (as of 7/8/09). The reality hit Roubini and just showed that Roubini's nothing more than a broken clock - correct twice a day.
Please dont blame Roubini...blame the WEF for inviting him back, and yes blame the reporters from CNBC and Marketwatch for asking him why he was wrong on China in 2009...no one is held accountable anymore and this includes the vapid entertainer, Nouriel Roubini...and no wonder we are in such a mess!
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