On the breakdown in growth in the Chinese – Australian nexus

China and Australia

As you may know two of my ten surprises for 2012 revolved around the Chinese Australian nexus. Here's what I wrote in January in my first Credit Writedowns Pro post:

China will have a hard landing: I have a tough time on this one. But in keeping with the 50% odds when everyone else gives it one in three, I think China is the big story here. People who aren’t in the thrall of the China bull story know that the malinvestment there has reached breathtaking proportions. And with a second synchronised global growth slowdown in the last five years forming, China will get hit just as its over-investment bubble is popping. There are only so many losses it can socialise while its export and banking sectors are hit at the same time. The stimulus won’t be enough to ...


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