There have been minor signs that one of my biggest risks for 2011 could be coming to fruition. John Tang, China strategist at UBS, discussed why he believes China is set for a “significant” slow-down. Tang cites 3 primary reasons why China is set to slow:
1) It is becoming increasingly difficult to obtain a loa.
2) Interest rates are surging.
3) Property development is slowing.
China remains the one very strong leg of the recovery and a slow-down in the region would certainly pose a substantial risk to the global economy. The commodity bubble would be particularly vulnerable in such an environment. The full interview is attached: