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From peak China to China pique

First published: Financial Times 14/05/2020

Frosty doesn’t begin to describe the current relationship between China and the US, and a growing list of other countries.

No one can say for sure how the complex pieces of this geopolitical kaleidoscope will settle. There is no question, though, that the coronavirus pandemic has opened up a new and dangerous front in tensions between China and the West, which will cast long shadows over the global system long after the worst of the pandemic is behind us.

It has also rocked China’s economy in ways that no one predicted, compounding the structural headwinds that were in any event pointing to a decade of much slower economic growth. More suddenly than we could have expected, China now has a major unemployment problem. From an economic perspective, we may have arrived at what we could call ‘Peak China’. Put another way, it’s the moment when a major demand shock and balance sheet and other growth-sapping economic factors are colliding. Read on ……