Chinese economist Andy Xie issued a provocative prediction in an interview with MarketWatch published on Thursday.
Xie, a former economist for Morgan Stanley and the World Bank, is one of the foremost warning voices predicting a massive Chinese economic implosion. He explained that the Chinese market grew too quickly, and in order to prevent a crash, the Chinese government has been artificially propping up the economy, simply delaying the inevitable. Xie told MarketWatch that China “is riding a tiger and is terrified of a crash.”
The ripple from such a crash would have significant implications for the U.S. and world markets. A stall in the Chinese markets early in 2015 sent rumbles through the international stock market, affecting prices of commodities such as crude oil.
It would be difficult to discern the widespread effects of a Great Depression-style market crash the likes of which Xie predicts. Xie advises the West to pay attention to the Chinese economy, stating, “The economists in the West who say that China isn't very important are wrong.”