| In the unlikely event that China's growth rate collapses in the coming years, global growth would decline sharply simply because China accounts for such a large share of the world economy. But the knock-on effects on activity elsewhere would be smaller, and the deflation risks should be limited.
Some have suggested that China is heading for a downturn comparable to that experienced by Japan, where average GDP growth slowed abruptly from 4.4 per cent in the 1980s to 1.5 per cent in the 1990s. We don't think this will happen. However, here we consider what the implications would be if we turn out to be wrong...............................................Full Article: Source
|