The eyes of the world are on China. Over the past five years, its GDP has grown by more than 60% and its exports by 140%. Every week more than $1bn of foreign direct investment (FDI) flows into the country. China is already the fourth largest trading nation and, on current growth trends, by the year 2040, China will overtake the US as the world’s largest economy. China’s low-cost manufacturing and huge potential markets now have a profound impact on the earnings, prospects and plans of all leading global businesses.
So, any serious stalling of China’s economy would have repercussions around the world. A “hard-landing” would probably affect global commodity prices, which have risen significantly on the back of China’s voracious demand, erode margins for manufactured goods as Chinese businesses struggle against a backdrop of over-capacity, and damage stock valuations of the multinationals that trade with China or have invested there.
