China vulnerable to shocks, says Nobel laureate

China’s breakneck pace of growth may not last and the world’s seventh largest economy could be vulnerable to external shocks, said Edward Prescott, the Nobel 2004 economics prize laureate.

Prescott, who teaches at the Arizona State University and also works for the
Federal Reserve Bank of Minneapolis, compared China’s growth with that of Brazil’s from the 1960s to the 1980s.

“China’s spectacular rate of growth may not be sustainable, and the country risks the same shocks that hit Brazil in the 80s,” he told an economics conference in Singapore on Friday.

Yahoo