Oof, that's gonna hurt their social credit score. I wonder if they'll be able to file for Chapter 1984 bankruptcy? =P
In all seriousness, I wonder if China does hit a recession, what the effects will be on the world economy?
In all seriousness, I wonder if China does hit a recession, what the effects will be on the world economy?
China won't just stop buying stuff from the West, and the stuff they buy isn't quite critical.
You'd see a commodities softening, which would hurt Aussie Canada, but hey, cheap commodities for others is not so bad.
Surely manufactured goods would be cheaper, or won't rise with inflation, again good for Western surpluses.
But the perceived economic shocks would be bad: Wall Street is looking for a reason to sell off right now, given historic highs, ugly multiples, everyone's looking at each other waiting to see who'll hit the panic button first, so some 'big ugly macro news' is enough to stifle things quite substantial. Macro perception is important, much like in 2008 the most important part of the bailouts were not the bailouts, but the signal of the bailouts i.e. implying that 'the Fed + Gov has the back of the US economy' meaning everyone can move forward knowing there will be no domino failure.
By so many accounts China needs to slow down anyhow.
I think it’s probably awful for the world economy. The largest companies of the world trade and operate everywhere and their business may well depend on stability in Chinese demand. That could pull the world into a recession. I’m thinking an international finance/banking company could see its assets severely deflate and thus spread the re-evaluation around the globe.
I bet it will be quite positive - contract manufacturing becoming big again, new player other than American coming on the scene first time in 2 decades.
https://en.wikipedia.org/wiki/National_debt_of_the_United_St...
It is, however, a useful lie to spread for political reasons.