China’s Influence on Smaller Economies May Be Shrinking
China Evergrande has officially been labeled a defaulter in a financial drama that’s likely to culminate with a massive restructuring of the world’s most indebted developer. It’s just one of many financial crises now facing China. Above, a pedestrian walks through Evergrande’s City Plaza development in Beijing on Dec. 10.
Photographer: Andrea Verdelli/BloombergThe fortunes of the world’s emerging economies once rose or fell in lockstep with China. No longer.
Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist, writes that in recent years we’ve seen a gradual decoupling of GDP growth between the Asian giant and the world’s smaller economies. Now Covid-19 has collapsed the link altogether. China is growing more slowly as its government imposes lockdowns to combat the virus, all while reining in its real estate moguls and tech oligarchs.