China debt could wreck the global economy: Leading economist warns country could suffer a calamitous slowdown (Maybe it has already started)

.
–Economist Ken Rogoff said that China could suffer a calamitous slowdown
–He was the former chief economist at the International Monetary Fund
–China is the UK’s sixth biggest export market after sales have shot up

 .

By HUGO DUNCAN, DEPUTY FINANCE EDITOR FOR THE DAILY MAIL
PUBLISHED: 19:08 EST, 26 September 2016 | UPDATED: 03:05 EST, 27 September 2016

China poses the biggest threat to the global economy as its debts soar, according to a leading economist.

.
Ken Rogoff, the former chief economist at the International Monetary Fund, said the country could suffer a calamitous slowdown – dragging the rest of the world down with it.

.
A so-called ‘hard landing’ in the world’s second biggest economy, where growth drops to dangerously low levels, would be a disaster for other countries including Britain.

.
China is the UK’s sixth biggest export market with sales of goods made in British factories to the People’s Republic jumping from £877million in 1998 to £15.5billion in 2014.

.
Ken Rogoff (pictured), the former chief economist at the International Monetary Fund, said China could suffer a calamitous slowdown
+2
Ken Rogoff (pictured), the former chief economist at the International Monetary Fund, said China could suffer a calamitous slowdown

.
But exports to China fell 22 per cent to £12.1billion in 2015 with car exports down a thumping 37.5 per cent.

.
Mr Rogoff, who is now professor of economics at Harvard University, said it was too early to tell what impact Brexit will have on the UK economy.

.
But he said China was the biggest worry for the rest of the world.

.
‘There is no question, China is the greatest risk,’ he said. ‘China has been the engine of global growth. China has been really important. But China is going through a big political revolution. And I think the economy is slowing down much more than the official figures show.’

.

Official figures published by the authorities in Beijing show that the Chinese economy grew by 6.9 per cent in 2015 – the slowest rate of expansion for 25 years and down from 7.3 per cent in 2014.

.
The IMF is forecasting growth of 6.6 per cent this year and 6.2 per cent next year but it is widely thought this overstates the strength of the Chinese economy.

.
Capital Economics reckons the Chinese economy grew by just 4.2 per cent last year and has pencilled in expansion of 5 per cent this year and 4.5 per cent next year.

.

China is the UK’s sixth biggest export market with sales of goods made in British factories to the People’s Republic jumping from £877million in 1998 to £15.5billion in 2014

.
Mr Rogoff warned that China could suffer a ‘hard landing’ – a much sharper slowdown that would have disastrous consequences for the rest of the world.

.
‘Everyone says China’s different, the state owns everything, they can control it,’ he said. ‘Only to a point. It’s definitely a worry, a hard landing in China. We’re having a pretty sharp landing already and I worry about China becoming more of a problem.’

.
The Bank of England last week warned that debt levels in China ‘are very high by international standards’.

.
Government, corporate and household debt now accounts for 240 per cent of national income having doubled since 2008.

.
Mr Rogoff said: ‘If you want to look at part of the world that has a debt problem, look at China. They’ve seen credit fuelled growth and these things don’ t go on forever.’

.
Mark Williams, chief Asia economist at Capital Economics, said debt levels in China ‘have been rising at a dizzying rate’.

.
He added: ‘One of the lessons of economic history is that rapid increases in debt in short spans of time usually end badly – typically with a financial crisis. We’ve all got used to the idea of China as one of the great locomotives of global growth, but it could look very different five years from now.’

.
Read more: http://www.dailymail.co.uk/news/article-3808919/China-debt-wreck-global-economy-Leading-economist-warns-country-suffer-calamitous-slowdown.html#ixzz4LSt8PPJj
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Related:

When shipping companies are going out of business and selling their ships — the short term prospects for economic recovery look dark.

 (Protecting workers could become troublesome as China’s economy slows)

Tags: , , , , , , , , , , , , , , , , , , , , ,

One Response to “China debt could wreck the global economy: Leading economist warns country could suffer a calamitous slowdown (Maybe it has already started)”

  1. daveyone1 Says:

    Reblogged this on World Peace Forum.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: