Chinese whispers drive metals boom

BBC NEWS | Business: “some experts warn against betting too heavily on commodities, arguing that Chinese growth could still be outweighed by events in the rest of the world.

‘There’s a risk of a bubble here,’ said Matthew Parry, commodities analyst at the Economist Intelligence Unit.

‘China is still a smaller economy than the UK, and a lot of the growth in demand we’re seeing could be down to re-stocking.’

Other analysts have warned that China’s economic renaissance may turn out to be more fragile than it appears.

They highlight fears that government efforts to tackle bad debts weighing on the country’s banks may trigger a credit squeeze, stopping the economy in its tracks.

Another danger is that Beijing may yield to US pressure for a revaluation of the Chinese currency, sharply reducing the country’s vital export earnings. “

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.