China is the number one threat to the global economy, analysts say, with an over-inflated “triple bubble” threatening to drag global gross domestic product below 2 per cent. On the surface things appear to have stabilised in China this week. The nation’s second-quarter GDP number came in at 7 per cent, above analyst estimates of 6.8 per cent, while retail sales and industrial production figures well exceeded expectations.
But GDP is still at its lowest level since 2009, and the Shanghai Composite Index failed to bounce on the positive news on Wednesday, although it has largely stabilised this week, down 1.4 per cent on Friday. Credit Suisse’s global research team, led by Andrew Garthwaite, said China’s “triple bubble” – a combination of the third biggest credit bubble, the biggest investment bubble and the second biggest real estate bubble of all time – was the single biggest risk to the global economy. MORE