Thursday, January 31, 2008

In praise of decoupling

A kindler, gentler look at decoupling but I remain unconvinced.

Basically there are two huge drivers to global growth right now, US and China, both are at the center of an ecosystem of other economies feeding into them.

And here's the kicker, China relies on the US.

Here's the money quote:

Diversification will only go so far, however, particularly if US consumption nosedives, says Mr Sheard. “Asia, centred on China, has become even more interlinked into the global economy, the driving impetus of which has been the US,” he said. It is hard to be global and decoupled at the same time.

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