Rogoff Warns of China Crisis

25 Feb

Former chief economist of the IMF, Ken Rogoff, warns of a regional crisis when the China “bubble” collapses:

China’s economic growth will plunge to as low as 2 percent following the collapse of a “debt-fueled bubble” within 10 years, sparking a regional recession, according to Harvard University Professor Ken Rogoff.

“We would learn just how important China is when that happens. It would cause a recession everywhere surrounding” the country, including Japan and South Korea, and be “horrible” for Latin American commodity exporters, he said.

The impacts on Australia – a leading commodity exporter – arising from a collapse in demand from China are obvious.

Rogoff was one of very few economists who predicted the GFC.

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