By Marcus Leach

Business Monitor International (BMI) has released the latest special report,
China 2012: From Miracle To Meltdown outlining a case for a severe growth collapse in China driven by declining money supply growth rate, accelerating inflation and external slowdown with a threat of a double dip recession in the US.

According to BMI, the bearish outlook for China's economy is more credible
now than at any point in recent history. With China’s housing market
exhibiting characteristics typically seen at the end of a bubble, a steep
drop in house prices as developers offload inventory would pose a risk of a
cash crunch to businesses operating in China, especially property developers
and small and medium enterprises (SMEs).

As the repayment capacity of loans given to local government investment vehicles increasingly comes under threat, BMI also expects a pronounced correction in investment spending and instability in China’s banking sector.

From banking sector exposure and weak fiscal and monetary position, the
report also focuses on China’s consumer market and its ability to shoulder
the burden of growth should Chinese export growth fall due to a weakening US dollar and lower import demand from the US and Europe.

Moreover China 2012: From Miracle to Meltdown assesses the impact of a Chinese hard landing on the regional economy. While no country would be
immune from a Chinese hard landing, BMI argues that Australia is most
precariously positioned to suffer the consequences of this severe economic
slowdown. A Chinese hard landing would push the Australian economy over the edge, likely ushering in a recession and potentially triggering a financial

Given the importance of China to the global economy, the report enables
global investors, strategists and decision-makers across the corporate
spectrum to identify business growth opportunities, avoid market risks and
aid strategic planning activities over the short, medium and long term.

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