Ruchir Sharma rightly dashed dreams of a permanent resurgence in China (Opinion, May possibly 21). Certainly, old Chinese hands see their economy as a distant (but far larger) echo of Japan’s peak in 1990, for the similar motives — declining demographics and excessive debt fueling as well a lot investment, in Japan’s case corporate investment, in China’s case infrastructure and residential home.
China is also experiencing the similar protective response from the US as Japan did then. This time, nonetheless, China’s sluggish economy could have a lot more significant international consequences, and not just in terms of weakening demand for raw supplies such as iron ore and copper. Germany, which lengthy ago hitched its wagon to the Chinese star and benefited significantly from auto and machinery exports, may perhaps now endure from China’s drive for self-sufficiency. Its auto exports to China are declining, though Chinese brands are crowding out German merchandise on the domestic industry and are poised to invade the EU industry.
And what are Chinese domestic investors carrying out — obtaining gold at a premium to globe rates. Not a sign of self-confidence in one’s personal economy.
Richard Cragg
London KT1, UK