Unique and timely insight on China from John Richardson

Economic growth

SHARE THIS STORY

Lewis curve Asia.pngCredit where credit is due, is the blog’s motto. It would thus like to recognise the insight of co-author John Richardson in being one of the first people to warn publicly that the economies of China and India both faced enormous risks in their quest to reach developed country status.

Writing 18 months ago, when publishing chapter 6 of Boom, Gloom and the New Normal‘, John warned:

“In recent years, it has become received wisdom that China and India will reach developed economy status. This will result in “the end of economic cycles,” as one excited chemicals industry executive said in 2008, because of the strength of their future growth.

For a while, it seemed as if he might be right as China’s economy expanded at more than 10% per year. At the same time, India began long-awaited economic reforms necessary to unlock its enormous potential. But as we discuss in chapter six of “Boom, Gloom and the New Normal,” there are major risks to this rosy scenario”.

Other commentators and analysts knew better, of course.

They declared that most Indians and Chinese, although earning only $10/day, were now becoming “middle class” and reaching Western living standards. They saw no relevance in the insights of Nobel Laureate Sir Arthur Lewis and his ‘Lewis Curve’ (above), about the likely difficult transition ahead. And they simply ignored repeated warnings from those such as China’s premier Wen that its economy was “unstable, unbalanced, uncoordinated and unsustainable“.

Today, of course, ‘received wisdom‘ now believes it was always ‘obvious’ that China and India would run into problems. But this view, like the earlier optimism, is not founded on John’s close analysis and inside knowledge of the markets. It simply reflects today’s reality that both economies have hit major road-blocks and are slowing fast.

This is a great pity. Things don’t simply ‘happen’ out of the blue. They have complex causes, which need to be carefully evaluated and discussed in order to reach intelligent conclusions. Equally, we need to recognise people who take the trouble to do this, and who have the courage to publicly stand out from the crowd.

The blog is very proud to work with John. It hopes its readers will continue to benefit from his insights for a long time to come.

PREVIOUS POST

"Its going to be scary"

10/06/2013

As the Financial Times wrote on Saturday: “Earlier this year, it all seeme...

Learn more
NEXT POST

Global auto sales up 3%, as China's luxury market stalls

12/06/2013

Auto sales data is now available for the first 4 months of the year, covering th...

Learn more
More posts
Europe’s auto sector suffers as Dieselgate and China’s downturn hit sales
16/06/2019

Trade wars, Dieselgate and recession risk are having a major impact on the European auto industry, a...

Read
2019 Global Outlook – a mid-year update: ACS webinar on Thursday
04/06/2019

There will be no shortage of important topics to discuss on Thursday, at my regular Chemistry and t...

Read
US-China trade war confirms political risk is now a key factor for companies and the economy
12/05/2019

There are few real surprises in life, and President Trump’s decision to launch a full-scale tr...

Read
Uber’s $91bn IPO marks the top for today’s debt-fuelled stock markets
28/04/2019

Uber’s IPO next month is set to effectively “ring the bell” at the top of the post...

Read
The End of “Business as Usual”
21/04/2019

In my interview for Real Vision earlier this month, (where the world’s most successful invest...

Read
Most businesses were nowhere near Ready for Brexit last Friday – we mustn’t make the same mistake again
14/04/2019

Thank goodness for backbench MPs and the European Union. Without their efforts, the UK would by now ...

Read
Don’t get carried away by Beijing’s stimulus
07/04/2019

Residential construction work in Qingdao, China. Government stimulus is unlikely to deliver the econ...

Read
Businesses thrilled by Brexit uncertainty: “It’s exhilarating” says small business owner
01/04/2019

With the European Commission saying that a No Deal is now “likely“, small businesses acr...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more