Zambia To Be Hit Badly by China’s Debt Crackdown
China’s imminent debt crackdown is set to be a serious risk to Zambia’s economic growth due to our high dependence on the Chinese commodity consumption. Fitch has stated that China’s crackdown on debt will lead to a serious slow down in business investment abroad, forecasting that the world’s second biggest economy will slow down to just 4.5%
The biggest effect is predicted to be on commodity prices with Fitch projecting that oil and metal prices will fall 5-10%.
“It is hard to put a precise time frame on when China will start to see the deleveraging of the real economy, but at some point it looks inevitable,” said Brian Coulton, chief economist at Fitch.
“The scenario analysis we have undertaken suggests that, when it does occur, it will be a process that will be a significant drag on growth.”
This serves as another reminder to our government that is is vital we do more to diversity our economic and look more seriously at value addition. At present we rely to heavily on the Chinese which leaves us at the mercy of their markets and lacking our own economic autonomy.