Time will tell.
The bold prediction is by Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, who says a continuation of China’s slowdown in the next years may drag global economic growth below 2 percent, a threshold he views as equivalent to a world recession.
If true, it would be the first global slump over the past 50 year without the U.S. economy contracting.
“The next global recession will be made by China,” Sharma, who manages more than $25 billion, said in an interview at Bloomberg’s headquarters
“Over the next couple of years, China is likely to be the biggest source of vulnerability for the global economy.” China accounted for 38 percent of the global growth last year, up from 23 percent in 2010, according to Morgan Stanley.
China is the world’s largest importer of copper, aluminum and cotton, and the biggest trading partner for countries from Brazil to South Africa.