Institute For The Future

The China Slowdown

The World Bank's East Asia and Pacific blog has a good update on the most recent China quarterly forecast. The Bank's official forecast for 2008 China GDP growth is now 9.8 percent, a full 2 points below 2007 growth. Elsewhere, we've been hearing about high fuel prices and the cheap dollar putting the squeeze on Chinese manufacturing export platforms.

 

Call me a Cassandra, but I'm worried about what's propping up the Chinese economy at this point. With so many huge imbalances and such high expectations for the future among the Chinese people, engineering any kind of soft landing is going to be like landing a 747 in the fog with no training. You can keep tweaking the knobs and dials, but you have little idea what the changes do, and no idea how they are affecting your trajectory.

 

It seems like nearly every workshop during my entire 3 year tenure at the Institute for the Future has been marked by at least one session where we think about the impact of China on whatever we're talking about: future of manufacturing, future of energy, future of consumer activism, etc. Not once have we ever -seriously- considered the implications if the Chinese economy runs off the rails.

 

I'm going to think about this for a day or two and post some possibilities, but I'd love to get some of your insights. What would a China in a multi-year recession (or even just dramatically slower growth) mean for your organization?