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- Title
China and the UK Economy.
- Authors
Knapp, Simon
- Abstract
China's boom has been a major pillar of the global economic recovery from early 2002 onwards. However, earlier this year fears that the economic boom was threatening to run out of control prompted the Chinese authorities to implement a number of targeted measures to try to restrain activity in the most overheated sectors. This article by Simon Knapp discusses both how much the UK has benefited from the China boom and how much it might be affected if the Chinese slowdown now becomes a hard landing. It argues that emerging Asia, Japan and raw materials producers have been the principal beneficiaries of the China boom, while the UK's gains have been small, because exports to the whole of Asia only account for 9% of the total. Equally, looking forward, the UK, and the UK's two major trading partners, the US and Eurozone, would only be relatively lightly affected if Chinese growth decelerated rapidly, as they would be helped by offsets such as lower oil prices and a lower interest rate profile. However, the current evidence suggests that the Chinese economy is slowing down in broadly the way the government wants, with the greatest deceleration in the previously overheated sectors but relatively little impact on the export and consumer sectors. An abrupt halt in bank lending could, however, still pose a significant downside risk.
- Subjects
CHINA; UNITED Kingdom; UNITED States; ECONOMIC conditions in China; ECONOMIC conditions in Great Britain; EXPORTS; RAW materials; INTERNATIONAL economic relations; BANKING industry
- Publication
Economic Outlook, 2004, Vol 28, Issue 5, p9
- ISSN
0140-489X
- Publication type
Article
- DOI
10.1111/j.1468-0319.2004.00457.x