China’s bubble has popped

| 22 April 2008 09:20

I f anyone doubted it, China’s bubble has finally popped. The Shanghai Composite Index is down 50% from its highs in 2007. That is a massive downswing that must have broader consequences. Moreover, this is likely the result of a realization that Chinese equities were overvalued in a world where the U.S. consumer is under siege and inflation is rising. What the impact will be on Chinese manufacturers and Chinese consumers is still unclear.

What is clear is that the high-flying Chinese economy is about to suffer some unexpected turbulence just in time for the Beijing Olympics. I hope this puts the notion of global decoupling to rest.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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