Word: walker
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...Walker has been arguing for months that China was in trouble. As the U.S., Europe and Japan suffer through a recession in 2009, Walker expects Chinese exports to contract. In a sign of how much damage the global slowdown is causing in China, the government this week estimated that 20 million migrant laborers have lost their jobs. But just as important to Chinese growth is private investment. Corporate profitability in China was deteriorating even before the worst of the global financial crisis hit, and that will soften investment, which makes up more than 40% of GDP. In the first...
...massive stimulus plan will keep growth at a high level despite the global downturn. In November, Beijing announced a $586 billion package, much of it new spending on infrastructure. Wen Jiabao, China's premier, said recently that he expects China to meet its 8% growth target for 2009. Walker, however, is much more skeptical about the government's ability to rescue the economy. "What the government has to contend with is a slowdown in every other sector of the economy," he says. Since the Chinese government accounts for only some 20% of GDP, "how it will make...
...will have repercussions for the rest of the region and the world. The hope among other economists was that trade within Asia, with a stable China at its core, could spare exporters such as Taiwan and South Korea from the worst of the recession in the West. That hope, Walker argues, has evaporated. A major downturn in China "takes the floor away" from growth in the rest of Asia, he says, leaving the region more exposed to the woes of the U.S. and Europe. Most vulnerable are Asia's smaller, trade-dependent economies. He forecasts Taiwan and Singapore could...
...There are some bright spots. Walker is relatively bullish on India, which he believes could growth 3% to 5% in 2009, possibly making it the world's fastest-growing economy. The reason, he says, is India isn't as exposed to the global downturn as China. "India has not been growing in the past decade because of excess world growth," Walker says. "Domestic demand is the strong component." He also argues that Asia could take the lead in a global recovery, and might show signs of an upturn by early 2010. The turnaround will be sparked by Asian companies, which...
...Still, Walker worries that the pain caused by this global crisis will lead to "a de-globalization move" over the next two years by Asian governments. Countries looking to preserve their own economies could become less eager to promote global trade, he says, and could resort to protectionism as competition for export markets becomes cutthroat. There will be "much more introspection, especially in emerging markets, about joining the party with as much gusto as in the past," Walker says. "There is going to be a lot of questioning about capital market opening. The old model is broken and they...