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IMF: For 2012 China Dominates Global Economy, U.S. Stalls, Europe In Decline

January 25, 2012 by  

IMF: For 2012 China Dominates Global Economy, U.S. Stalls, Europe In Decline

On Tuesday, the International Monetary Fund said that it predicts slowing global economic growth and a rising risk of global economic calamity if governments fail to act appropriately.

Last fall, the IMF predicted that the global economy would expand by a paltry 4 percent, but has since downgraded its expectations to 3.25 percent global economic growth in 2012.

The economy that makes up the largest chunk of the projected growth is China (the world’s most rapidly expanding economy), which is expected to enjoy 8.2 percent growth over the next year. In comparison, the United States, which owes trillions of dollars to the Chinese, is expected to experience only 1.8 percent economic growth in 2012.

The IMF says that the slowed global economic growth falls heavily on the economic disaster unfolding in eurozone countries, where a “mild recession” is expected to take hold.

“The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere. Financial conditions have deteriorated, growth prospects have dimmed, and downside risks have escalated,” says a portion of the IMF’s World Economic Outlook Update.

The IMF calls for a series of “decisive and consistent” global policy actions, including:

  • Fiscal adjustment. In the near term, sufficient fiscal adjustment is in motion in most advanced economies. Countries should let automatic stabilizers operate freely for as long as they can readily finance higher deficits.
  • Liquidity. While fiscal consolidation proceeds in the advanced economies, monetary policy should continue to support growth, as long as inflation expectations remain anchored and unemployment stays high.
  • Bank deleveraging. To break the adverse loops between weak growth and deteriorating bank balance sheets, more capital needs to be injected into the euro area banks (including from public sources) and supervisors must do whatever possible to avoid excessively fast deleveraging that could lead to a devastating credit crunch.
  • Financial adjustment. Easy funding in the short-term must be coupled with continued progress to repair and reform financial systems. This is a critical element of normalizing credit conditions and would help reduce the burden on monetary and fiscal policy of supporting the recovery.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • s c

    I have a smallish remark to make on this topic. You probably won’t see this or hear this via our worthless media whores, so here it is. China in NO WAY earned their status. China was GIVEN the keys to this world’s economic kingdom.
    This is NO accident. It was planned that way. When enough people in America finally understand that they were sold out by a long line of criminal politicians (on BOTH sides of the corrupted aisle), maybe they’ll find some ways to exact an ounce of flesh before they resort to basic survival mode.
    As for China, I have nothing against the Chinese people. When it comes to their ‘leaders,’ I hope that when they learn the full cost of temporary ownership of the earth’s economic keys, try chewing on them. It is far beyond ironic that your country will take its turn on the cosmic wheel of justice. While I’m not the only one who will wish this in your direction [China], it is both hilarious and truly just that you, too, will truly live in ‘interesting times.’
    You could try to blame it on your masters, but they’ll be busy trying to survive themselves. What beautiful irony, is it not?

    • ernest

      CHINA took over when NAFTA was put in by Clinton ( the first Bush set it up and Clinton signed it as soon as he got in? ) and they are still doing the so-called free-trade deals they were even braging it would help us while they were building the factorys in China & mexico then it took a few years for the companys to move WELL ITS ALL DONE NOW.
      Donald Trump is the only one I ever heard say anything but no-one thinks for them selfs anymore so no-one listens !!!!!

      • eddie47d

        Bush indeed set up NAFTA yet is was Newt Gingrich who was the drum major for NAFTA who then twisted Clinton’s arm to sign it with false promises of great things.

      • Bob Marshall

        The U.S. has lost 32% of its manufacturing jobs since 2000. An average of 50,000 per month since China joined the World Trade Organization. back in 1970, 25% of jobs were manufacturing jobs, today it is 9%. Americans have an addiction for cheap foreign products.This came from a 2011 report.try finding products made in the USA today.Who really benefited from NAFTA and NAFTA of the Pacific? For every dollar the China spends on goods from the U.S.A. the U.S.A. spends four on the goods from China.How many jobs have been created in America by outsourcing?

      • Mark in LA

        NAFTA was the brainchild of the Reagan Administration. The Mexicans just wouldn’t go along and he had to settle for the Canadian American Free Trade Agreement. After another Mexican financial crisis Salinas agreed to join in (probably with the help of some bribing).

        Why do you people always leave out the real villian in all these destroy America schemes. They all started with Reagan whether it was looking the other way for Wall Street and the banks, illegal immigration and guest workers to destroy the wage scale, they all began under Reagan. Yes he was too damn stupid to understand the consequences of these peograms and may not even have known what they really were about, but his trainers knew exactly what they were doing and who’s bread they were buttering.

    • Sirian

      s c,
      There is much more unrest in China than the day to day Joe’s hear about. HA, they are having demonstrations all over the place due to the people coming to their senses. How far will it go, who knows? That remains in the speculation file and files of such are much more easily manipulated then most people realize. Even so, for some strange reason, they like the capitalistic economic base that has been brought into fruition over the past thirty/forty years far more than what they have been held under for well over 60 years. The “leaders” have taken advantage of it, obviously, and the IMF is just now realizing the potential impact it will have on the “global economies”? What a joke. A beautiful irony? Absolutely!! How long will their leaders last – speculation file on that one but eventually they too will be brought down. Forcibly or otherwise.

    • Mary

      You’re right. I’m sure the masters did’t think in the irony. You know we have no chance.

  • T-Texas

    This regime hasn’t helped it at all.Tricky Dickey was the one that started this relationship back with China.I think Chang Ki Seck(sp wrong) went communist during the Truman administration but we have had problems since.McAuthor knew that we should have dealt them a crippling blow when they joined the North Koreans.

    • Ted Crawford

      Chiang Kai-shek never turned Communist. He lead the Nationalists in a civil war against the Communists, but lost in 1933!

    • Mark in LA

      More American nonsense. MacAuther was a prima donna who could never get over the fact that he had almost nothing to do with the second world war. The war in the Pacific was primarily a naval battle. The leadership were even thinking about ignoring the Phillipines since the Japanese had no way of resupplying them.

      The idea that he could have done anything with a nut like Mao in charge of China is ridiculous. Only nuclear weapons would have gotten him to stop throwing Chinese peasants lives into the bonfire. Thousands of American men died unnecessarily for his vanity after he crossed the Yalu River after China warned it would enter the war if he did so.

      There was nothing worth fighting for or winning in the Korean war. So what if North and South Korea are joined and both basket cases. How does that really effect Americans? It would have just forced us to let Japan rearm sooner.

  • Oldmonkey

    What most miss is Chaina’s #2 Zhou Enlai was a closet Fascist. It is Zhou who kept PLA from destroying the Forbidden City and the priceless relic elsewhere in China stolen by Chiang Kaishieh. Zhou’s best student was Deng Xiaoping, who was without doubt a Fascist. It was Zhou who rescued China from the disaster of China’s Second 5 Year Plan AKA “the Great Leap Forward” that starved 20 million Chinses to death. It was the only time in documented Chinese history known of canabalism.

    As to Chiang the dirty SOB was initially very similar to Obama; Facist lite, with Socialist tendancies. What turned him further right, and made him a Corprotists was necessity of vibrant businesses bringing in tax revenue to support a large well equipped military to protect Taiwan (whose people didn’t want him or his army there) from the Communits.

    It is of intrest Deng and Chiang’s son Chiang Qinguo were classmates in college in USSR. Presently almost all of Chiang’s current living descendants are US citizens; many by birth

  • Ted Crawford

    I find it informative that according to a Citigroup study by Michael Saunders and Mark Schofield most Euoropean countries and, once again America are being considered for credit rating downgrades. Which country isn’t? Ireland! the recent actions by them to drasticly cut their taxes, especially their Capital Gains Taxes, caused such a spirt in economic growth that France petitioned the UN to force them to return to their prevous levels! Now which party is suggestion that policy here?

  • rjh

    Chiang Kai-shek never turned Communist. He lead the Nationalists in a civil war against the Communists, but lost in 1933!
    ^^^^^TRUE ENOUGH… most people don’t know that his military training was
    in USSR. that does not make him a “commie” but had to affect him somehow.

  • Wyatt

    If China dominates the global economy so much , perhaps its time she started paying back her debt to the United States plus interest form the time of loan. Lets see , from WWII to date ? How well will she dominate then ?

    • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

      Can you supply some actual Debt figures, interest and maturity dates?

  • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

    How can the IMF recommend the de-leveraging of the banks and at the same time allow more deficit bugeting? You cant have the banks causing a credit squeeze and at the same times recommending governments expand their deficit spending programs. The IMF cant have it both ways.

    And why do we need to encourage growthwhich requires more borrowing for goods and services we dont really need? Why cant we be happy with zero grow for a few years of readjustment to our economies?

  • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

    China has and still is very successful at feeding over 1.5 billion of its people for some years now so it knows how to grow food I’m sure. It does not need any advice from use i’m sure.

    • Mark in LA

      So is India but you wouldn’t want their diet either. Feeding people in a third world economy isn’t that big a deal. It’s just that most people spend all their time doing it because they are using human and animal power to farm. So while they are fed many are malnouriched and have very little time for anything but farmwork.

  • ranger hall

    What is the RICHEST Country in the World, Most of you brains out there should know the answer.

    • WickedPickle

      The one(s) that refuses to be run by politician’s ideals and elitist decisions, that’s who..

  • s c

    First, hump the idea of participating in a ‘global’ economy. It’s a rigged game, created by puppet masters who also double as pc, mind-control schizophrenics. Second, a certain prez could put MANY people to work NOW by 1) cleaning up beaches that are somehow ‘contaminated’ by all manner of nasty crap and 2) ‘volunteering’ hordes of Sierra Club wingnuts (and fruits, nuts and flakes who get paid to send in feedback to this website) to help clean up MANY TONS of trash brought into America by Obummer’s Mexican chums.
    WILL Obummer see the light and ACT on it? Of course not! He’s a utopian, and he defines and re-defines what a utopia is daily. He can’t be bothered with such trivia.
    Third, if the National Guard controlled our open borders, that would negate the need for a ‘fence’ and put qualified people TO WORK without having to be trained (unlike TSA, where few are qualified, and their brain transplants obviously don’t work).
    Fourth, if jobs are important to Obummer, I’m an alien from 5,000 light-years away, and I am also a certified, part-time translator for polar bears and Al ‘duh’ Gore. Oh, also I sell rare crystal balls to ‘special’ members of Congress.

  • leroy roberts

    he must be an alien,a person with a brain would not write that junk.

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