Columnist and writer Morgan Stanley’s Ruchir Sharma, who is also described as one of the world’s largest investors, predicted the slowdown in the BRIC economies of Brazil, Russia, India and China, in 2012’s Breakout Nations: In Pursuit of the Next Economic Miracles. In his 2016 book The Rise and Fall of Nations, he provided ten rules of change in a post-crisis world.
In November 2016, Sharma also criticised the Government’s demonetisation policy in a blog published in The Times of India, observing: “Scrapping large bills may destroy some hidden wealth today, but the black economy will start regenerating itself tomorrow in the absence of deeper changes in the culture and institutions that foster it.”
But it’s not India alone that Sharma has been critical of. In an article on the business news website Quartz, he explained that China is “foiling their own plans to lead the global economy”.
In a video above produced by Big Think, Sharma describes why he thinks China’s economy – the world’s second largest – is running on “borrowed time”.
“What our research shows is that if you look back in history the single most important predictor of economic and financial trouble is when a country takes on too much debt over a short span of time,” begins Sharma in the video.
He elaborates: “If a country does that it’s bound to make bad loans. It’s bound to make bad investment decisions because there’s no way that you can lend too much money and find enough creditworthy borrowers to make the right decisions with that money over a short span of time.”