There are many who say the end of the Olympics in Beijing will signal the culmination of the long global growth phase driven by China.
There are many who say the end of the Olympics in Beijing will signal the culmination of the long global growth phase driven by China.
While no-one is predicting the world will reverse recent gains, there has long been a view that the end of August 2008 will mark the time for a well-earned rest for China's economic growth, much like the thousands of athletes that have been competing in the capital and other venues.
This is not necessarily a Y2K event, a doomsday scenario of collapse, but simply the belief that, once the theatre of the Olympics was over, the facade could be taken down and the stage restructured.
In any economy, that would be possible, in a one-party state, which might like to reassert its authority after the pretence of openness, it seems quite likely.
Anyway, you need not look to China for the signs; they are all around us.
Those in the stronger-for-longer camp won't like to hear this, but there is a growing amount of bad news outside our pond of good fortune, which makes me a doubter in the short term.
On paper, the story of Chinese and Indian growth, driven by swift industrialisation and rapid urbanisation is a good one.
On the 20-year view it's probably right. But that doesn't mean there can't be slowdowns and hiccups, which will hit those who've priced in the long-term hopes in some sort of annual average.
It doesn't work that way. Ask any stock market investor.
The thing is, China is not just an internal story. Growth has come because the world needs cheap goods, and no-one can do that better than the Chinese.
But the world is slowing and, as big as China has become, it is unlikely to shoulder the burden of world growth on its own.
The US is spluttering and has struggled for some time. That's a 'known known', in the words of their own political dribblers.
The known unknowns, though, are also plentiful and it's time we introduced ourselves to them.
Europe is also ailing. No better example is the UK, where the slump has been swift and catastrophic, with banks falling over, real estate values plunging and unemployment rapidly heading north.
Take this list of stories from The Times daily 'Kill The Competition' email on Thursday last week as an example.
- Unemployment is surging at its fastest rate for 16 years, with 20,000 people joining the dole queue last month.
- The pound fell to its weakest level in 12 years after the Bank of England signalled that it was no longer prepared to raise interest rates.
- Credit Suisse was fined a total of almost £6 million ($11.2 million) in London and New York after the Swiss bank's internal systems failed.
- The Bank of England believes the economy is looking very sick indeed and could well stop breathing next year.
That sounds like fun doesn't it? But don't stop there.
Asian markets are very sick at the moment. Vietnam's stock market has almost halved over six months, India's indices are all down as much as 20 per cent over a similar period, and Thailand's stock market has also crashed.
Of course, let's not forget what's happening on our own east coast, with news out of the major markets there very bad indeed.
Some believe much the same has to be expected of China, where experience in free-market capitalism is simply too limited for people to realise what can go wrong when the herd changes direction.
The price of success
SPEAKING of the Olympics, there's one very salutary lesson to take from our continued success in the pool.
Australia has bought its way to sporting success over the past 30 years, since the shattering experience of 1976 when the country failed to win a gold medal.
In those days, the vast Soviet Union and its eastern bloc 'partner' East Germany dominated the medal count, a tribute to the high profile sport was given in those communist countries and, many believe, the organised cheating that took place.
The Australian Institute of Sport is a model for creating something from nothing, by seeking to match the state-sponsored approach of the communists, whose own sporting prowess receded as their political structures collapsed.
What is interesting is just how many countries have followed the Aussie model. Great Britain is a fine example when you look at its success in the pool.
As other nations follow the Australian lead, naturally it will get harder to produce standout results.
It will be interesting to see if government funding becomes harder to justify if our standing falls over the next few decades. My suspicion is that if the state stopped funding sport, the gold medal torrent would cease very quickly.
The lesson for business and government is that success can be bought. The big question, though, is sustainability. There's no point investing in pet projects or subsidising special interest groups in industry if they can't be made to fly on their own in the long run - unless you can prove there are other benefits, beyond political expediency.
Long-term achievement is about exploiting natural advantages, everything else is the funding equivalent of drugs in sport - with all the costs associated with that.
Short-term success feels good. Sustained performance is exhilarating.
