Hillary Clinton may tout a “fair” economy that spreads the wealth as a means of fostering growth.
And Donald Trump’s view of the present economy as a bubble that needs immediate attention resonates with expert economists, especially those of the Ronald Reagan-like tax-cutting mindset.
But as Ken Rogoff, former chief economist at the International Monetary Fund just said, the matter of money on a global scale is something of immediate concern – and on that score, all eyes need to be on China.
“There is no question,” said Rogoff, now a professor of economics at Harvard University, the Daily Mail reported, “China is the greatest risk. China has been the engine of global growth. China has been really important. But China is going through a big political revolution, and I think the economy is slowing down much more than the official figures show.”
Statistics show a slow in growth in China that could impact the rest of the world’s economy, the Daily Mail reported. For instance: In 2015, China’s economy grew by nearly seven percent. But that’s its slowest rate in 25 years, and down from 7.3 percent the previous year.
The IMF, meanwhile, is predicting next year’s growth for China at 6.2 percent.
“Everyone says China’s different,” Rogoff said, the Daily Mail reported, “the state owns everything, they can control it. Only to a point. It’s definitely a worry, a hard landing in China. We’re having a pretty sharp landing already and I worry about China becoming more of a problem.”
And he’s hardly alone in that view.
Mark Williams, chief Asia economist at Capital Economics, said the debt levels in China have been on a sharp incline for some time.
“One of the lessons of economic history,” he said, “is that rapid increases in debt in short spans of time usually end badly, typically with a financial crisis. We’ve all got used to the idea of China as one of the great locomotives of global growth. But it could look very different five years from now.”
Source: Daily Mail