The China Disconnect – Stephen Roach

The world remains in the grips of a China mania. Although it still accounts for only about 4% of world GDP, China continues to be viewed as something close to a savior for an otherwise growth-starved world. It’s all about China’s “delta” — visions of an open-ended 8-9% growth trajectory that enthralls western industrialists, investors, and policy makers alike. Meanwhile, the Chinese leadership is treading far more cautiously as it takes its slowdown campaign into a second year. This underscores an important disconnect: Just when the world seems to be counting on China the most, there is a growing risk the Chinese economy goes the other way.