Walker Sees China Growth Slowing To 4% - 6%

Jim Walker of Asianomics painted a somewhat sobering picture of the Chinese economy in an interview on Bloomberg today. Walker projects that Chinese growth could more than halve to around 4% - 6% and sees the credit crunch lasting 4-5 years.

(Click on the image for interview)

Walker has a simple no-nonsense way of talking. When asked about his forecast timeline for the credit crunch to play out he replied;

"Well it's been a long time building. We've had 15 years of a super boom basically in the US. We've had 15 years of financial alchemy from the central banks. So it's probably going to take quite a long time for the whole structured products fiasco to play out and deflate. So 4 to 5 years sounds about a sensible time period for me."

No doubt Walker's forecasts would be viewed as extreme by mainstream economists. However as often happens when its too late, the extreme becomes accepted as mainstream. Anyone remember the housing bust that couldn't happen because house prices always go up?