Chinese slowdown is biggest threat to prosperity, says WEF

Chinese slowdown is biggest threat to prosperity, says WEF

business.timesonline.co.uk

A slowdown could lead to serious unemployment and social unrest in China and badly hit the country’s trading partners, as well as global commodity and capital markets, the WEF warned yesterday.

Even a slowing from the galloping 10 per cent annual growth averaged over the past few decades to below 6 per cent would be enough to trigger damaging repercussions, it said.

(visit the link for the full news article)

The WEF goes as far as saying that a Chinese slowdown is one of the three biggest threats to (economic) stability. Social stability has always been a problem threatening China. In fact, it is the reason why China has such a tight grip on its population. They have more than once experienced how disastrous social unrest can be and want to avoid this at all cost.

Although you don't see much of it in the MSM and China pretends it economy continues to grow steadily, regardless of the economic trouble in the West, the reality is different. The crisis lead to mass unemployment and various economists have suggested that China, alike most other countries, has manipulated its economical statistics.

"The WEF also suggested that China could be the source of a second economic threat — an asset price bubble — and pointed to rocketing property prices in Beijing and Shanghai as evidence of possible trouble ahead."

"Beijing faced a number of challenges, including the need to rebalance itself away from dependence on exports towards greater domestic demand and the need to maintain a stable currency in the face of its growing accumulation of foreign reserves, the WEF said."

I know too little about the Chinese housing market to objectively judge its status, but according to this report, they might be facing their own property bubble, which was one of the instigators for ''our'' economic crisis.

It's obvious that China should become dependent on its rapidly growing middle-class, so that they are less vulnerable to economic turbulence abroad, but that's not going to happen soon. It's gonna take a while for the Chinese middle class to replace foreign export markets. Until then, China is very much exposed to foreign economic troubles. This also indicates that their so-called lack of affection smells fishy.

business.timesonline.co.uk
(visit the link for the full news article)