China to lead global recession this time: Ruchir Sharma

The last recession was led by US, but China is likely to usurp that not-so-coveted position, says Ruchir Sharma, head of emerging markets and global macro, Morgan Stanley Investment Management

Sharma is of the view that China is neither in control of its equity market, nor its overall economy and that poses a significant global economic risk.

Shanghai markets have in the recent past plunged 8.5 percent in a single day merely on the negative growth sentiment prevailing. The government is trying to shore up confidence and has infact entrusted a securities fund with USD 500 billion to keep buying shares with just one-point agenda in mind- to keep the market afloat. But the measure has hardly impressed analysts. owning to a widespread lack of confidence in the government.

"This time it (recession) could well be led by China just because the size of the Chinese economy is so big in the global economy and that's where the vulnerability lies given the debt build-up that china has seen over the last few years," argues Sharma.