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Comment by jaimex2 | Hacker News Reader

I can't see a global recession from this - just one in China and Australia which is already in one.

I find it hard to believe that this will be contained to Australia and China.

Australia certainly deserves what it gets (my home country) given its attitude towards debt and housing, but I think the contagion is real.

Contagion is real - but - contagion spreads along specific vectors, some more damaging than others.

A China 'slowdown' will probably not hurt the US, in fact, it may give the US leverage.

A China 'crash' will surely have emotional contagion among investors, which of course matters, because if they pull the plug on activities it'll translate into real world effects ...

But the 'material' contagion of a Chinese crash ... it's harder to predict.

I suggest that the issue is far more likely to be damaging as a 'trigger' to a bubble burst or something else, rather than materially damaging in and of itself.

I think people fear that the trouble in China is reduced global demand, not just the trade wars or a local problem.

Yes, it will have knock-on effects, but a serious China slowdown is in and of itself no reason to cause recession pretty much anywhere.

Again, it could burst some kind of bubble and start a recession, but a China slowdown itself is not enough.

I was trying to point out that since China's factories are so much export oriented that seeing decreased factory activity most likely means a weak global demand.

If the problem was with chinese real-estate, yes, the risk for contagion was minimal.

Australia and most of Asia largely went through the financial crisis in 2008 with very few problems compared to the US/Europe and China as a deliberate policy has kept its financial system closed to itself, there are fewer ways for a recession to spread between China and the rest of the world in the same way it did during the financial crisis.

I don't think Australia is technically in recession.

Australia is far from recession, but a global recession is as matter of time.

The only way that the economy "grows" indefinitely is if it regularly dips, and that is exactly how it has been working since WWII, with dips/recessions at 1975, 1982, 1991 and 2009.

Only because the global commodities market picked up at just the right time. Just like we rode out the GFC pretty well, coincidentally saved by the last mining boom (although to be fair, the stimulus spending at that point did also work pretty well).

It's surreal watching our major parties both trying to claim credit for the global economic climate.

The major parties jump to grasping any straw. Why are you surprised!

It's part of a trade war that shows no signs of subsiding.

It will badly hurt the largest economies in the world, which all depend on trade. If we're lucky it won't lead to global war.

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