From Bloomberg, Jul 13, 2015
Forget about all the shoes, toys and other exports. China may soon have another thing to offer the world: a recession.
True or False? Do we have sufficient evidence of this argument?
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The China stimulated recession is the prediction from 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.
That 2 percent is 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 also contracting.
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.
China’s economic slowdown will thus have an enormous global impact from mines to railways and to ports.