Letter: Yet another Asian economy facing protectionist woes
Ruchir Sharma has rightly punctured dreams of a sustained reopening boom in China (Opinion, May well 21). Certainly, old China hands see its economy as a distant (but far bigger) echo of Japan’s at its 1990 peak, and for the very same factors — weakening demographics and also significantly debt fuelling also significantly investment, in Japan’s case corporate investment, in China’s case infrastructure and residential house.
China is also experiencing the very same US protectionist backlash as Japan did then. This time, although, a sluggish Chinese economy could have extra really serious worldwide ramifications, and not basically in terms of weakening demand for raw components such as iron ore and copper. Germany, which extended ago hitched its wagon to China’s star, and benefited hugely from exports of vehicles and machinery could now endure from China’s drive for self-sufficiency. Its automobile exports to China are falling, though Chinese brands are squeezing out German tends to make domestically and are poised to invade the EU market place.
And what are Chinese domestic investors undertaking — getting gold at a premium to globe rates. Not a sign of self-assurance in their personal economy.
London KT1, UK
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