Monday, October 5, 2009

GE's Global Chief Warns of Chinese Slowdown

The head of GE International, Nani Beccalli, told the Financial Times during an interview that he is concerned about the risk that the governments of the world will withdraw stimulus support too rapidly, and potentially jeopardize the tenuous global recovery. Surprisingly, when asked which specific country(s) are most at risk of a government misstep, Mr. Beccalli cited China, reflecting his view that the Chinese economy would suffer a significant slowdown if support from Beijing is withdrawn too quickly.

I would venture to say that Mr. Beccalli, who is in charge of all of General Electric's operations outside the United States, is uniquely positioned to accurately assess both the global economy as a whole, and the relative contribution of it's individual nation components. Thus, the GE executives assertion regarding China represents the most credible bucking of conventional wisdom about that country in some time. After all, if every economic tale told about China is assumed to be valid and true, then it could reasonably be surmised that the red-nation is on the brink of not only taking over earth, but also venturing into neighboring solar systems and subjugating their alien inhabitants. For some, it just seems that the US is out of growth industries.

What will America's next growth industry be? I certainly can't say with any certainty, however, a quick thought process might reinforce the notion that we aren't supposed to know what comes next. First of all, imagine the year is 1950, and you as an American as surveying the nation's economic prospects for the next half-century. Could you, at that time, ever imagine that the semi-conductor industry would give birth to powerful American corporations? No, because you wouldn't have even known what a semi-conductor was, or when it would be invented. The Technology Sector as we know it was nothing in 1950; we couldn't even conceive of it's existence. Most people probably thought that US auto makers would continue taking over the world, oblivious to the fact that an upstart US tech company - Google - would come closer to achieving that goal than GM ever had. A little bit of skepticism could go a long way towards a more accurate assessment of China, not to mention the future of the global economic and political landscape.

*long GE Sphere: Related Content

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