Are we nearing a world recession?

DEPARTMENT OF EARLY WARNINGS: China’s giant economy is in deep trouble, which is casting a large shadow over the global economy. China’s growth has plummeted to its lowest rate since the global financial crisis, yet any major stimulus will add to its staggering debt load and further weaken its fragile banking system. Its growing bubble makes America’s 2008 housing bubble look like a hiccup. China can’t turn its storehouse of U.S. Treasuries, European debt and Japanese bonds into cash without unleashing a global run on the yuan. Yet a Chinese crash would bring down Brazil, Australia, and all other major commodities markets, undermine sovereign and corporate credit ratings of all export-dependent economies, and harm an already-weak Eurozone. The U.S. economy would be caught in the downdraft.
The global economy is not a zero-sum game in which China’s problems benefit us. Quite the reverse: We’re dependent on a strong Chinese economy to finance our debt, purchase our exports, and keep much of the rest of the world economy afloat. Buckle your seatbelts.

Robert Reich