In this interview given to Mohamed Fathy from Asharq Business Bloomberg, Christof Rühl, member of the Advisory Board of Crystol Energy and a Senior Fellow at the Harvard Kennedy School and the Center on Global Energy Policy at Columbia University, comments on the slowing economic growth of China and its impact on the world.
Christof argues that the Chinese economic slowdown means three different things. First, as much as China was expected to swiftly recover, a stagnation in growth means that the country could not translate its growth into a sustainable and long term growth. Second, in the race between the US and China, the former seems to have the upper hand, with the latter not transparently disclosing its data which raises some question marks. Third, China has a debt crisis and its monetary policy hints that its current situation is similar to other suffering economies, i.e. it fears the disruptive impacts of inflation on a healthy economic recovery.
Christof adds that the Chinese government is aware of the options and dilemmas to be faced, but part of the problem lies in the lethargic implementation of economic reforms. In addition, the imbalance in each of the investment, real estate and financial markets is slowly growing and consequently affecting the Chinese fiscal policy. The past 30 years have seen an almost interrupted growth for China, but the current fragile state is concerning and the Chinese government should avoid this at all costs.