Anyone in a position of power and influence in China is deeply connected to the communist party. Offering a point of view that is radically different from the party view is discouraged. The run up of the Chinese economy has been pretty darned impressive and in large part it has been a result of the consumer demand in the US and Europe. Anyone who thinks that can be replaced with a magic wave of a wand is delirious. Add to that the Chinese communist's historical failure to grasp reality with numbers, this has failure written all over it. The Olympics may turn out to be the high point of this regime before the recession ravages the authority of the current government.
Vladimir Putin tweaked sensibilities in the financial and political worlds by warning against government involvement. And Wen Jiabao went with optimism, especially on his own country's ability to avoid recession.Right. And everyone already recognizes that the 6.8% growth in Q4 was probably incorrect, with the real number being a point or two lower. To break even with incoming workers China needs 7% growth per quarter. I'd love to hear the theory on how that happens when their export markets have stopped buying. Do tell.
Looking at both East and West, the Chinese economy will stage a "quick rebound" of economic growth, but the US has a tougher job, facing the loss of $1 trillion in consumption, Zhu Min, executive vice president of Bank of China, told CNBC.com.
"In the States the housing industry has not stabilized" and there will be more deleveraging in the financial and household level leaving no doubt about a recession, he said.
And for the first time in 60 years, you'll see the developed countries contributing zero to the world economy, he added.
Quick government action in China will lead to a quick rebound, and although the economy will slow more in the first quarter, growth of 7 percent to 8 percent is manageable, he said.
