From Angus Grigg at the AFR:
There are few more credible voices on the world economy than Ben Bernanke, but even his sober reflections on China are unlikely to sway the bears.
The former Governor of the US Federal Reserve cut through much of the recent nonsense about China on Tuesday to make two simple, but well timed observations.
On the same day as Beijing released full year GDP figures showing growth of 6.9 per cent, Mr Bernanke told an audience in Hong Kong China’s recent wobbles would not bring down the world economy.
“Overall the [Chinese] slowdown does not seem to be so severe to threaten the global economy,” he said.
Bernanke may be credible following his heroic efforts to rescue the US economy in the GFC but let’s not mince words about his ability to foresee crisis given it was also he that declared the US subprime meltdown “contained” mere months before he was nationalising the entire US financial system.
A Bernanke all clear for China is a major warning bell!