Ruchir Sharma has rightly punctured dreams of a sustained reopening boom in China (Opinion, May possibly 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 causes — weakening demographics and as well substantially debt fuelling as well substantially 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, even though, a sluggish Chinese economy could have additional really serious worldwide ramifications, and not merely in terms of weakening demand for raw supplies such as iron ore and copper. Germany, which lengthy 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 car or truck exports to China are falling, though Chinese brands are squeezing out German tends to make domestically and are poised to invade the EU marketplace.
And what are Chinese domestic investors carrying out — getting gold at a premium to planet costs. Not a sign of self-assurance in their personal economy.
Richard Cragg
London KT1, UK
