Global financial crisis could slow China’s growth in 2012

The American consumer is slowly gaining confidence, but, perhaps not in time to innoculate China from the reverberations of a plodding global economy. China’s gross domestic output increased a meager 2 percent from the previous quarter combined with a 40 percent decline in the annual pace of property investment in December from November’s rate have attracted analysts’ attention.

“It indicates that in Q1 2012 the numbers will be very unpleasant. Policy easing will continue,” Yao Wei, an economist at Societe Generale in Hong Kong, tells Reuters. “It’s a very significant slowdown already in China,” she adds.

While China has mototored forward at an extraordinary pace, Charles Dumas and Diana Chayleva, analysts with Lombard Street Research, write in The Diplomat that in the last two decades China has attached its economy to the United States, including fixing the yuan rate to the dollar in 1994 to stabilize its economy.

“But the distortions entailed by China’s chosen mode of development now threaten it with a turbulent period of adjustment to an entirely different and probably uncongenial alternative route forward,” they write.

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