Mr Lawson says China has instruments to re-capitalise the banking sector in the event of a debt crisis.ABERDEEN Standard Investments' chief economist anticipates neither a US recession nor a Chinese credit crisis, but forecasts flat global growth for 2019.
Mr Lawson said that the risk-neutral yield curve's more ambiguous signals then demand confirmation against elements that"kill the business cycle" and cause a recession: oil price shocks, equity bubbles, credit imbalances, and aggressive monetary policy tightening. Similarly, he said that Chinese debt levels present a quite nuanced problem. A lot of China's debt is held in state-owned enterprises, which means that in the event of a crisis,"China has instruments to socialise and re-capitalise the banking sector."