China faces downturn, says OECD

11 February 2008

Hopes that China will rescue the world economy from suffering a major slowdown have been dashed by an authoritative new study which reveals that growth in the Far Eastern tiger is heading downwards.

 

New figures published by the Organisation for Economic Co-operation and Development reveal that China has joined the rest of the rich world in facing a possible downturn.

 

The news will come as a major disappointment for policymakers, many of whom had assumed that, although the United States may currently be in recession, strong growth in younger economies such as China and India would prevent a widespread global slowdown.

 

The OECD's composite leading indicator - a measure of when major economies experience turning points - is now showing that China, which has been growing at around 10pc for some years, is about to slow markedly. The CLI for China dropped by 0.7pc points in December. Usually a fall in the CLI, which is based on a multitude of surveys, presages an imminent drop in overall economic performance.

 

The Paris-based institution said: "The latest data for major OECD non-member economies point to a potential downturn in China, while continued expansion is ahead in Brazil, India and Russia."

 

By Edmund Conway, Economics Editor

© Graham Bishop