China is no longer the 'savior' of the world economy

Other than three years ago, China no longer "magic" can help revive the world economy is in crisis today.

Fall 2008, the Western view of China with an eye surprise and admiration when the government decided to pump huge amounts of money worth U.S. $ 586 billion to shore up the domestic economy.As a result, China has overcome the global economic crisis dramatically, Europe and America as well, so be good because the power demand in China increased.

"However, this time Chinese leaders have little room to operate," said Barry Eichengreen, chief economist at the University of California concern. China's growth, though still above 9% but is struggling with the late consequences of the stimulus package a few years ago and opened too wide liquidity. In July, inflation reached 6.5%, the highest rate in three years. The Central Bank of China is not likely to loosen monetary policy has been tightened recently, as well as direct reduction of 6.56% interest rate.

High debt ratio makes the situation more serious. Debts of cities, provinces and districts to accumulate in the course of the stimulus program had reached the level from 1.5 to 2.1 trillion dollars. According to official figures, the debt ratio is only about 17% of the total domestic product (BIP). However, the expert's analysis Dragonomics prestigious Beijing, the figure is actually 89%, that is higher than the debt of Portugal. Rolf Langhammer, Vice President of the Institute of World Economics in Kiel, said: "China's investment abroad may be forced to reduce to save the local and state enterprise debt was secretly early exit bankruptcy ". This first will be a heavy blow inflicted on America, because China is holding U.S. bonds worth 1,260 billion.

China is now America's largest creditor.

According to investment bank UBS of Switzerland, between 2008 and 2010 and credits under the Chinese banks has increased from 121 to 180% BIP. Analyst Wang Tao of UBS warned: "The increase from 35% to 40% during the five year history has always led to the crisis."

So no surprise that Chinese government agencies as well as protection money to implement all necessary measures to prevent the continued increase in credit lending. Initially, the private enterprises of China's middle class has almost no credit to borrow. Guangzhou City, the cradle of the private sector in the east coast, 90% small and medium businesses affected. Many businesses are forced to borrow at interest rates creep higher, sometimes up to 60% and a growing number of companies fall into bankruptcy.

If the economic crisis in the U.S. and EU, the more serious business of export dependence on China will increasingly greater pressure. According to calculations by experts of the German Bank in Hong Kong, if growth in the U.S. and the EU decreased by 1%, the growth of Chinese exports decreased by 7%.

Once China's economy losing momentum, the European economy, especially in Germany are also affected. In 2010, China's sixth largest customer for goods imported from Germany. Last time, the German car exports are excited because the consumption of products increased from 50 to 60%, but now seems that time has passed. For example, Mercedes-Benz 5 / 2011 you are nearly 17,000 cars in China, but to month 7 / 2011, sold 14,500 vehicles.