Economist Arthur Kroeber, previously an acknowledged bull on China, turns even bearish when he looks at the prospects for 2016. In Market Place he predicts “A turning point for the worse”.
Market Place:
First, the bad news about China’s shifting economy: “The risk is that if the government doesn’t do enough structural reform, you wind up with lower and lower growth and higher and higher debt, and pretty soon you wind up looking like Japan in the early 1990s,” said Arthur Kroeber, managing director of GaveKal Dragonomics in Beijing.
He predicts that in 2016, China’s economy will see a turning point for the worse. “We expect to see factory closures, and bankruptcies, and write-offs in the heavy industrial sector to accelerate this year by quite a lot. We’re entering a new era,” Kroeber said.
He estimates five to seven million layoffs for China’s heavy industrial sector.
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