China Economy Heading Towards a Train Wreck
Beijing: If there’s one thing global investors have come to expect over recent years, it’s China’s ability to generate unbelievable rates of economic growth.
Like clockwork, economic growth in the March quarter increased by 6.7% compared to a year earlier, smack in line with forecasts. This regularity is an irregularity in itself, ensuring scepticism from many in financial markets, as it takes just 15 days to generate the figure.
For every China bull out there, there now seems to be a bear. To Roy Smith, an academic at New York University, the breakneck growth seen in recent decades may be nearing its end, suggesting that he sees parallels with Japan’s build-up of bad loans in the late 1980s, which ended up hobbling the once highflying economy.
“China has followed Japan’s economic development model, and may now too be facing a financial crisis like Japan’s that it may not be able to control, and that could diminish its ability to become the next Asian superpower.” —Business Insider