I suppose when you appear at Davos you have to say something:
China’s economy is not headed for permanently slower growth, says former prime minister Kevin Rudd, who reckons Chinese consumers and businesses can drive faster expansion – if they get their mojo back.
But Mr Rudd also warned that geopolitics could “pull the floor” from underneath China’s growth model, if the recent detente between the United States and China did not last.
…Mr Rudd, who said he was speaking at Davos in a personal capacity rather than in his “day job” as Australia’s ambassador to the US, rejected the idea that China’s economy was peaking or permanently slowing.
Nonsense, Kevin07.
What does this trend in nominal growth look like to you:
As a household’s largest asset deflates, why would it spend? Instead, it will delverage:
And save:
As nominal growth crashes into persistent deflation, real interest rates rise and deleveraging spreads meaning incomes slow:
This is a rinse-and-repeat cycle:
It is pure Japanification, and nothing China has done so far will stop it.
Arguably, given the dire demographics, even if it were doing what it should, it would fail to stop it:
If you follow these talking points, mister former prime minister, you will save yourself further embarrassment.
