Ruchir Sharma has rightly punctured dreams of a sustained reopening boom in China (Opinion, May 21). Indeed, old China hands see its economy as a distant (but far larger) echo of Japan’s at its 1990 peak, and for the same reasons — weakening demographics and too much debt fuelling too much investment, in Japan’s case corporate investment, in China’s case infrastructure and residential property.

China is also experiencing the same US protectionist backlash as Japan did then. This time, though, a sluggish Chinese economy could have more serious global ramifications, and not simply in terms of weakening demand for raw materials such as iron ore and copper. Germany, which long ago hitched its wagon to China’s star, and benefited hugely from exports of cars and machinery could now suffer from China’s drive for self-sufficiency. Its car exports to China are falling, while Chinese brands are squeezing out German makes domestically and are poised to invade the EU market.

And what are Chinese domestic investors doing — buying gold at a premium to world prices. Not a sign of confidence in their own economy.

Richard Cragg
London KT1, UK

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