Macroscope | China must batten down for a rough ride in global markets this year
The day of reckoning will arrive when global markets factor in the risks from Brexit, Trumponomics, and the rise of the right in European geopolitics
China’s growth locomotive is starting to lose traction, slipping to its lowest rate of economic expansion for a quarter of a century.
Alarm bells must be sounding for the nation’s policymakers, as the economy desperately needs a clear path for growth to pick up speed again. In short, China is desperately dependent on a strong and stable global economy for growth to prosper.
The problem is that sound conditions for a flourishing world economic outlook are in short supply right now. Economic forecasters seem to be making light of the more upbeat mood for global recovery with US President Donald Trump picking up the reins of power, but, in truth, the road ahead in 2017 is littered with potential pitfalls and problems.
The list of systemic risks is long and growing.
The global stock market recovery looks all but spent, already running out of the vital monetary juice needed to keep the bull market booming. Doubts about Trump’s effectiveness and longevity are already starting to creep in. Europe remains a massive sink hole threatening to swallow up global economic confidence. And the spectre of an emerging market credit crisis is never too far away.
China might be looking to replace its growth model from export dependency to greater domestic-generated demand, but it’s a process that will take decades to put in place.
