July 12, 2010
- A d v e r t i s e m e n t
The G20 appears to be placing a large bet on China’s policymakers. At their summit last month, one developed country after another, bar the US, said they would cut fiscal deficits.
“If these economies all decide to reduce their budget deficits, what will drive global growth?” asked Simon Johnson, the former IMF chief economist. “The answer in Toronto was obvious: China.”
As a result, there will be unusually keen interest in China’s second-quarter growth figures, which are expected on Thursday.
China’s economy needs to slow from the turbocharged growth in the second half of last year and first quarter of this, which was fuelled by a huge increase in bank lending. But the second-quarter figures will be one of the early signs of whether China can pull off a measured cooling or whether the economy will slump when stimulus is taken away.