Jim O’Neill Says, Chinese Consumer is the most Important for World Economy
Former Goldman Sachs Chairman Jim O’Neill has told in a recent interview that the single most important thing in today’s world economy is reviving the Chinese consumer.
As per Chinese official statistics, the country’s growth has been slowed down to 6.6 percent in 2018, which is slowest in the last many years. The country’s on-going trade war with its biggest trading partner is also affecting China’s economy. The trade war coupled with slower growth is impacting China’s plan to have a transition from a manufacturing and export-led economy to a consumer-driven model.
O’Neill who now acts as chair of Chatham House, an international affairs think-tank, told that he was not at all surprised that the growth figures of China have dipped.
He said, “People shouldn’t be freaking out, the demographics have turned.” He also added that Beijing had planned some of the reduction in Chinese growth.
The former Goldman Sachs supremo said though the Chinese growth of 6.6 percent is slowest in almost last three decades, its year-on-year growth is still equivalent to the GDP of Australia.
However, O’Neill also noted one area where Chinese officials are struggling as far as the economy is concerned.
O’Neill said, “The one thing that does bother me is the Chinese consumer is slowing, that’s not supposed to happen, and the single most important thing in the world economy is the Chinese consumer slowing down.”
As per O’Neill Brexit also have similar if not equal impact on the world economy as it will impact both the United Kingdom and the European Union. As Britain has only 50 days to leave the European Union, the relations between the two parties have dipped after EU Council President Donald Tusk suggested on Wednesday there would be a “special place in Hell” for Brexiteers who had still offered a no-exit plan.
O’Neill told in an interview to CNBC that the rhetoric was perhaps “a bit surprising by Brussels leadership standards,” who were “normally extremely diplomatic,” but did not come entirely out of the blue.
He said, “It doesn’t look like the Brexiteers have thought about Irish border question at all, so kind of not surprising so for Brexiteers to feel a bit of their own general aggressiveness, you know they are not the only guys that can be mean and tough.”
As per him, Brexit with a no deal from the European Union has a meager chance.
He also added there had been signs that U.K. Prime Minister Theresa May, who visits Brussels Thursday, looked to be trying to weaken the resolve of the hard-core Brexit elements in her own party to get a withdrawal deal struck.
He said, “I wonder if the PM is trying to play a sort of Machiavellian game, she is sort of trying to split the hardcore Brexiteers, and she has sort of dragged them to a slightly different position.”