By Alan Wheatley
January 4, 2008
China’s growth is strong, its currency is rising and a huge stash of foreign reserves insulates the economy from the sort of external payments crisis that rocked Asia a decade ago.
But that is not keeping economists from playing “what if?”
What if China’s export engine suddenly seized up? What if the resulting overcapacity exposed a new crop of bad bank loans? What if share and property prices plunged, sapping confidence and triggering capital flight that rattled banks and hit the yuan?
Unlikely, yes. Impossible, no.
Stephen Jennings, head of Russian investment bank Renaissance Capital, told Reuters in Moscow that China’s double-digit growth and soaring equities could drop so hard that it would ….
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