If you have had the opportunity to analyse China's economy in the last year, you will know that it is definitely slowing down. Its economical growth is still present; however it came from 9.8% to 9.1% from 2010 to 2011. This means that China's growth rate is even lower than the minimum 9.2% that was expected by analyzers. What can this mean for those who live in the UK?
Is it possible that China is heading to a hard, forced landing? Well, China is definitely aware of its inflation problem, as it increases a little every year. In fact their only solution to this problem is letting some air out of their property bubble. This method is temporarily working. However, what will happen when they run out of usable properties?
See, property prices are shockingly decreasing. This wouldn't be a problem is credit was not getting tighter every year. Consequently, projects that are funded by the government will end up having economical issues. Bad debts will start filling the nation's banks, and little by little their economy will be definitely in strong crisis.
Have you thought about what consequences could this lading have on Britain's general economy? Well, it is very simple. Even if a soft landing was waiting for China, Britain's inflation rates are still above 6%, and food is much more expensive than that. China's total recession would surely have some horrible effects in the world's economy. However, the UK could have a very strong relief on its inflation pressure. Just now, the price index is increasing at a 5.2% per year! This could be substantially lowered if China was down.