Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
When China finally has its inevitable growth recession, which will almost surely be amplified by a financial crisis, given the economy's massive leverage, how will the rest of world be affected?Although it is true that the U.S. is still by far the biggest importer of final consumption goods (a large share of Chinese manufacturing imports are intermediate goods that end up being embodied in exports to the U.S. and Europe), foreign firms nonetheless still enjoy huge profits on sales in China.Thus, instead of leading to lower global real interest rates, a Chinese slowdown that spreads across Asia could paradoxically lead to higher interest rates elsewhere especially if a second Asian financial crisis leads to a sharp drawdown of central bank reserves. Thus, for global capital markets, a Chinese recession could easily prove to be a double whammy.As bad as a slowdown in exports to China would be for many countries, a significant rise in global interest rates would be much worse. A recession in China, amplified by a financial crisis, would constitute the third leg of the debt supercycle that began in the U.S. in 2008 and moved to Europe in 2010 .
of a progressive consumption tax
And what about Rochester?
The case for a World Carbon Bank
FOLLOW THIS ARTICLE