Tuesday, September 27, 2016

China debt could wreck the global economy: Leading economist warns country could suffer a calamitous slowdown

China poses the biggest threat to the global economy as its debts soar, according to a leading economist.

Ken Rogoff, the former chief economist at the International Monetary Fund, said the country could suffer a calamitous slowdown – dragging the rest of the world down with it.

A so-called 'hard landing' in the world's second biggest economy, where growth drops to dangerously low levels, would be a disaster for other countries including Britain.

China is the UK's sixth biggest export market with sales of goods made in British factories to the People's Republic jumping from £877million in 1998 to £15.5billion in 2014.

But exports to China fell 22 per cent to £12.1billion in 2015 with car exports down a thumping 37.5 per cent.

Mr Rogoff, who is now professor of economics at Harvard University, said it was too early to tell what impact Brexit will have on the UK economy.

But he said China was the biggest worry for the rest of the world.

'There is no question, China is the greatest risk,' he said. 'China has been the engine of global growth. China has been really important. But China is going through a big political revolution. And I think the economy is slowing down much more than the official figures show.' READ MORE