Will China be the first domino?

Rarely has the economic future been as difficult to predict as it was during the corona crisis. Too many imponderables and a lack of experience in dealing with pandemics do not exactly make it easier for politicians and scientists to correctly assess the scope of the risks and to prevent them. Although and precisely because this is so difficult, politicians must prepare better than before for such risks.

One of the most underestimated risks over the next two years could be a global financial crisis, especially in emerging markets like China. Precisely because the pandemic is focusing everyone’s attention, the rising risks for the financial system are becoming a blind spot.

Although international organizations are warning of increasing financial risks in emerging and developing countries – and have pushed through facilitation of financing and a partial debt moratorium – this risk is much greater than many suspect.