The world is relying too much on China to sustain global economic growth, according to Robert Lawrence Kuhn, author of How China’s Leaders Thinkand chairman of the Kuhn Foundation, which works to promote good relations between America and China.
“(China's) role has to be…totally focused on maintaining their own stability,” said Kuhn.
China's economy grew 10.3 percent last quarter, down from 11.9 in the previous quarter, and it showed further signs of slowdown in July. The news sent a chill through global markets this week, but Kuhn interprets the data differently. He said this growth is “terrific for the world” but added growth at this level risks inflation and other problems for China.
China & US Treasurys
Kuhn said China is conflicted by its large holdings of US Treasurys. He speculated the country wants to diversify but does not want to “spook markets.”
“If they move away too much or give the wrong signal, it will not only affect the value of their holdings in US securities, but it will also affect the US economy, which has a direct effect on the Chinese economy because of the export market,” he added.