Growth prospects for the world's leading economies this year look mixed, according to forecasts compiled by Schroders Economics. Activity in the Far East and China is set to remain strong while European output is expected to contract. Growth in the US is forecast to slow from the rapid pace recorded at the end of last year, but the economy is still predicted to expand by 2.5% in 1993. Japan will need the expected large dose of government spending in order to lift activity. High interest rates and a strong currency account for the European downturn, which is led by a sharp fall in German output and is concentrated among the remaining ERM members. A modest recovery in UK activity could be the bright spot in Europe this year. But it is China and the Far East which continue to stand out on a global basis. Some slowdown in Chinese activity seems likely this year as bottlenecks and inflation (official rate of 5.4%) begin to emerge. Nevertheless, the pace of new investment in the Special Economic Zones should ensure another year of rapid growth for a country whose total foreign exports have risen 115% (not adjusted for inflation) since 1987. Between 1987 and 1992 UK imports from China increased by 143%. Over the same period UK exports to China have suffered a roller-coaster ride. But UK exports to China in January 1993 were 55% higher than in January 1992 and last year Chinese worldwide imports increased by 26%.
Time to send some fast boats to China.