China s Landing Soft not Hard

The Global Economy s Inevitable Hard Landing

These hard landing scenarios are extreme.

Fears of a hard landing are overblown.

In China, a hard economic landing looks increasingly likely as the investment bubble deflates and net exports shrink.

But Europe could still suffer a hard landing.

Rapid normalization like that undertaken in the space of a year in 1994 would crash asset markets and risk leading to a hard economic landing.

NEW HAVEN Concern is growing that China s economy could be headed for a hard landing.

So the risk of a hard landing will rise by the end of this year.

To judge China s economic dynamism, the key indicator is its fiscal position. When, and only when, China s fiscal position is worsening rapidly will its economy suffer a hard landing.

The characteristics of a Chinese hard landing are well known from the Great Recession of 2008 2009.

By contrast, China has the instruments, resources, incentives, and knowledge to avoid an economic hard landing and, unlike Western countries, lacks any significant constituency wedded to lethal ideas like expansionary austerity.

BEIJING Back in the last quarter of 2011, when the decline in China s investment growth accelerated, concerns about a hard economic landing intensified, particularly given the authorities reluctance to pursue new expansionary policies.

A powerful rebalancing strategy offers the structural and cyclical support that will allow it to avoid a hard landing.

In the second half of 2011, China s growth rate could fall further, but there will be no hard landing.

But even the better performing ones like Brazil, Russia, India, and China are now at risk of a hard landing.

China s potentially strong domestic demand base and ample room for policy maneuvers can help it to avoid a hard landing.

The risk that China will experience a hard landing in the next two years may further hurt many emerging economies.

While hard landing scenarios, associated with a potential debt crisis, are also possible, the authorities have enough policy space to manage them.

True, Germany has been hit hard very hard by the economic crisis.

While there is a kernel of truth to each of these China specific concerns, they do not by themselves imply a hard landing.

But the historical rule of thumb is that the chances of a fast, hard landing have now surpassed 25 , and continue to climb.

The ECB will have to cut interest rates in 2008 if it wants to avoid a hard landing for the euro zone economy.

China s economy grew by 10 per year for the last three decades, but slowed to 7.8 last year and risks a hard landing.

These factors have inspired some China watchers to regard the country s economy as a bubble, if not to predict a hard landing in 2010.

With the Chinese economy far less threatened by export led weakening than it was three and a half years ago, a hard landing is unlikely.

Some factors are cyclical, but others state capitalism, the risk of a hard landing in China, the end of the commodity super cycle are more structural.

If China is to preserve its gains in global stature, it must avoid a political hard landing. For the time being, at least five different scenarios are conceivable.

The mere possibility of an imminent hard landing for the dollar and with it, for the US and world economy should be alarming enough to mobilize concerted action.

As a result, the reforms needed to rebalance the economy may not occur fast enough to prevent a hard landing when, by next year, an investment bust materializes.

Against the background of a shaky global recovery, concerns have grown considerably over a possible hard landing for the Chinese economy, caused by monetary tightening aimed at controlling inflation.

Among emerging economies, China could face a hard landing by late 2014 if critical structural reforms are postponed, and the other BRICs need to turn away from state capitalism.

Other advanced economies or emerging markets (the rest of the euro zone New Zealand, Iceland, Estonia, Latvia, and some Southeast European economies) are also nearing a recessionary hard landing.

In India, the question is whether newly elected Prime Minister Narendra Modi will move decisively to fulfill voters high expectations for economic reform before his post victory honeymoon is over. And China will have to mitigate financial risks if it hopes to avoid a hard landing.

The landing was perfect.

China s Last Soft Landing?

There is now also the beginning of a hard landing in emerging markets as the recession in advanced economies, falling commodity prices, and capital flight take their toll on growth.

Asians need not be pessimistic the perfect storm of a hard landing in China, a double dip recession in the United States, and a collapse of the eurozone is unlikely.

But much hard work remains to mobilize economic and financial support.

These factors have inspired some China watchers to regard the country s economy as a bubble, if not to predict a hard landing in 2010. But that judgment seems premature, at best.

So a US hard landing and global slowdown is unavoidable. Much greater and more rapid reduction of official interest rates may at best affect how long and protracted the downturn will be.

SINGAPORE The recent financial turmoil in China, with interbank loan rates spiking to double digits within days, provides further confirmation that the world s second largest economy is headed for a hard landing.

The plane made a hard landing and was still carrying a large amount of fuel, so it burst into flames, killing the majority of the passengers and several people on the ground.

Easy travel plus hard economic times means that immigration rates may accelerate to the point where social friction exceeds general economic benefit. Similarly, hard economic times may worsen relations among governments, as well as domestic conflicts that can lead to violence.

There's now a ban on catching them and even landing them and even landing ones that are caught accidentally.