It is almost exactly 20 years since China joined the World Trade Organization as a $1tn economy. Since then, China’s economy has grown to almost $15tn, unleashing a wave of prosperity in developing countries that helped lift more than 1bn people out of poverty.
But now a crisis in China’s property sector, as manifest in the financial problems of developers Evergrande and Fantasia, has many worried that China’s near-insatiable demand for raw materials, which long proved a potent engine of growth for emerging economies, has run out of steam.
“China’s property sector is right at the end of a boom period. That is negative news . . . particularly for countries that have ridden the coattails of that boom,” said William Jackson, chief emerging markets economist at Capital Economics, who expects that the commodity power houses of Brazil and South Africa will be hit especially hard.