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Economists can’t reiterate enough the importance of China to the global economy.The hot debate regarding China these days is whether its slowing economy will land hard or soft.
In a new paper titled “Braking China…Without Breaking The World,” BlackRock argues that it is critical for the global economy that China lands softly. Here are six reasons why from BlackRock’s Russ Koesterich’s iShares Blog:
- China has quickly become the second-largest economy in the world.
- China will likely contribute two-fifths to global growth this year, twice as much as the United States. See the chart below:
- Resource-hungry China has an outsized influence on most commodities markets.
- China is the largest foreign holder of US Treasuries.
- GDP per capita in China jumped more than 20-fold to $4,400 in the 30-year period ended in 2010.
- China is now the largest market in the world for cars, computers, mobile phones and countless other products. Wine sales in China, for instance, have more than tripled in just five years.