China is a huge chunk of global growth — but for how long?
Lately, there have been plenty of news reports suggesting that China’s hard-charging economy might be simmering down. Why is that worrisome? Because, as this chart from Menzie Chinn shows, China was expected to make the biggest single contribution to global GDP growth this year:
The numbers come from the IMF’s World Economic Outlook: In 2012, China, India, Russia and the United States alone were expected to provide more than half the world’s economic growth. The euro zone and Brazil, for their part, were expected to act as a drag — and yes, the IMF might be too optimistic about Europe finding its footing again by 2013.
But now both China and India are slowing down, too. Chinn has a horde of additional charts showing the downturn in China, particularly in the country’s property market. There’s been plenty of talk that China will carry out new stimulus measures — according to The New York Times, the government is even considering a “Cash for Clunkers”-type program to bolster vehicle and appliance sales. But if those two behemoths can’t get growing again, the world is in for a sharp decline.
Related: Here’s Matt Yglesias with more on the slowdown in China, India, and Brazil.
* Update: Changed the title, since it’s not quite right to say that China’s “propping up” the world economy.