Keynesian Economists Agree: China to Have “Hard Landing”

By:  Bob Adelmann
01/24/2012
       
Keynesian Economists Agree: China to Have “Hard Landing”

Mainstream economist Robert Samuelson admitted last week that the case for the ending of the economic boom in China has some substance. Keynesian economist Paul Krugman also confirmed that China is in trouble and questioned its ability to avoid a hard landing.


 

Mainstream economist Robert Samuelson admitted last week that the case for the ending of the economic boom in China has some substance. Keynesian economist Paul Krugman also confirmed that China is in trouble and questioned its ability to avoid a hard landing.

Samuelson raised rhetorical questions about China’s economic future, all with the same answer: “Could the world’s economic juggernaut, having grown an average of 10 percent annually for three decades, face a slowdown…or a recession?” Yes, it could. “Does it have a real estate ‘bubble’ about to ‘pop?’ ” Yes, it does. Could that have “global consequences?” Yes, it will.

Noting that Nomura Securities is predicting a one-in-three possibility of a hard landing — defined as a drop in China’s GDP to five percent or less — Samuelson said that such a sharp slowdown “would raise unemployment and social discontent” with consequences similar to the start of the Great Recession between 2007 and 2009 in the United States. Samuelson admitted that the Chinese government has created what “seems [to be] a classic speculative bubble:

Click here to read the entire article.

Photo: Bank of China Headquarters, Beijing, China.

The JBS Weekly Member Update offers activism tips, new educational tools, upcoming events, and JBS perspective. Every Monday this e-newsletter will keep you informed on current action projects and offer insight into news events you won't hear from the mainstream media.
JBS Facebook JBS Twitter JBS YouTube JBS RSS Feed