De-coupling theory a myth
BEFORE IT BECAME clear the United States – and the rest of the world with it – would fall into recession, “de-coupling” was one of the buzzwords in economic news. The word described what analysts thought would happen: that big emerging markets – such as China – would de-couple from the slowdown in the US.
The reality has been the very opposite. The sub-prime mortgage debacle in the US and subsequent credit freeze spread like a virus worldwide, infecting fast-growing China as well. As the graph shows, China’s exports have dropped. Nedbank says in its latest
that slowing Chinese export growth, slumping investment spending, falling property prices as well as factory closures and rising stockpiles suggest China’s economy is succumbing to the slowdown in its key export markets. Bloomberg reports China’s economy expanded at its slowest pace in seven years in fourth quarter 2008. Gross