GDP growth in mainland China could collapse to between 3% and 5% come 2007 says CLSA's distinguished chief economist Dr Jim Walker. The figure, which he revealed at CLSA's China Forum this week, visibly stunned an interview room full of Chinese journalists given how much lower it is than official government pronouncements.
Conventional wisdom states that any drop in growth below 7% would cause social collapse in China, since unemployment from restructuring would be growing faster than new business. The upshot of such a scenario could be buy-ins by foreign multinationals, which would make the acquisitions made in Thailand and Korea post-1997 crisis look like a car boot sale....
