Friday, May 21, 2004

China Is Global Economy's 800-Pound Gorilla

China Is Global Economy's 800-Pound Gorilla
William Pesek Jr.

Traveling around Asia, it's hard not to view the region as a vast web of interconnected strings, all attached to China at the middle.

If you think that's an overstatement, consider this: Japan, by far Asia's biggest economy, is recovering from a 13-year malaise. And what are policy makers and investors here talking about? China and the specter of a slowdown in the world's sexiest economy.

That people here are more excited about a sudden drop in Chinese growth than a Japanese revival sheds light on the rising level of hysteria over China's outlook.

While the stakes of a Chinese slowdown are well known, it's not clear that global investors appreciate how difficult a task faces officials in Beijing. Much could go wrong with China's attempts to modernize its economy, and problems there could send shockwaves around the globe.

China is confident it can cool growth without a meltdown. That's music to the ears of Asian leaders counting on China to succeed in easing growth to about 7 percent this year from 9.1 percent last year. At least publicly, Asian and U.S. policy makers say China's chances are good. ...Link

And a related story: The Fed And Pavlov's Sheep

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