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East-West Balance

For some time there has been a question about east-west balance – which is to say “what will happen to the eastern economies when the west cannot afford to buy so much?”

Personally I think it will be a bit bumpy but these things have a way of finding their own equilibrium and that the Chinese and Indian consumers will pick up the slack where the USA and Europe drop off. So when we cannot afford to buy from China we will find that we can once again afford to make things ourselves – we are already strong in specialist niche and local/regional markets and the re-balancing of the forces of east-west trade will also provide an opportunity for UK manufacturing to sell to the eastern countries  if we are prepared to take it. Indeed China in particular is likely to positively encourage it as they find a need to reduce their own export/import inbalance.

I found this recently which makes interesting reading.