This is an insightful article by leading economist Carmen Reinhart. She claims that as central bankers and finance ministers gather for the IMF’s annual meetings in Lima, the emerging world is rife with symptoms of increasing economic vulnerability. Reinhart points out that some of those symptoms, like slowing growth, are obvious and quantifiable – but others are dangerous partly because they are difficult to discern.
On the surface, the emerging markets are suffering because of slower growth in China and weak commodity prices. However, this article looks at the risk of bilateral loans from China to the developing world.
For another excellent insight into the risks in emerging markets, take a look at this latest viewpoint from the Economist.
Ultimately, I guess it all depends on the economic outlook for China – personally, I’m optimistic.