A Chinese recession is inevitable – don't think it won't affect you | Kenneth Rogoff

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Analysts say a Chinese recession would only hurt the region. That may be wishful thinking

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? With US President Donald Trump’s trade war hitting China just as growth was already slowing, this is no idle question.

Typical estimates, for example those embodied in the International Monetary Fund’s assessments of country risk, suggest an economic slowdown in China will hurt everyone. But the acute pain, according to the IMF, will be more regionally concentrated and confined than would be the case for a deep recession in the United States. Unfortunately, this might be wishful thinking.

Related: Trump is reckless – but he knows he can’t afford to antagonise China | Barry Eichengreen

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Link : A Chinese recession is inevitable – don’t think it won’t affect you | Kenneth Rogoff


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