‘A hard landing for emerging-market economies may also be at hand. Among the so-called BRICs, Russia will be in an outright recession in 2009. Growth in China will slow to 5 percent or less, representing a hard landing for a country that needs expansion of close to 10 percent to move 10 million to 15 million poor rural farmers into the urban industrial sector every year. Brazil will barely grow in 2009. Even India will experience a sharp slowdown. Most other emerging market economies will suffer a similar hard landing’.

The German news magazine Spiegel was equally apocalyptic:

‘Never before in postwar history has there been an economic slump that has dragged down so many economies at the same time, from the major players of the G-7 to economic midgets, from high-tech economies to developing countries. And all of this at an incomprehensible pace...

These developments have rolled across the global economy like shock waves. They affect the carmakers in Detroit, where employees are worried about their jobs. They have spread to the city of Guangzhou in southern China, where textile factories are laying off workers by the thousands. ...And the hope that the emerging economies could disengage themselves from the economic slump and grow on their own proved to be deceptive. The world has become multipolar, just as the crisis itself is multipolar.

And it saw a greater threat on the horizon; ‘now the threat of a new protectionism is taking shape’.

So the first threat to Africa could be an end to the world commodities boom which has boosted earnings for many African countries, as the hope that demand from China and India would sustain global demand is undermined.

But one analysis has also suggested that China’s African presence may not be as stable and long-term as many had hoped. Jeff Herbst and Greg Mills claim that ‘In practice, Chinese entrepreneurs have been the first to leave when the market turned. More than 60 Chinese mining companies have left the mineral-rich Katanga province in the Democratic Republic of Congo in the past two months, as cobalt and copper prices have more than halved. More than 100 small Chinese operators are reported to have left Zambian mines for the same reason’.

They describe the impact of falling prices on Zambia, where the Kwacha lost 75% of its value in 45 days, and ‘the mines are closing as many cannot produce at the current cost, and unemployment is soaring’. They also claim that China’s ambitious $5bn infrastructure and mining package in DRC has ‘gone very quiet as the copper price has plummeted’.

On the other hand while smaller private Chinese operators may be pulling out, the attitude of larger state-owned companies which can afford a longer-term view, could be more consistent. They would be more likely to maintain their African stakes, while also taking the opportunity to use their cash balances to take advantage of bargain prices across the board, including in wealthier countries. As the Financial Times reported; ‘Mining executives say that with no need to answer to shareholders, many state-backed companies can take a long-term view on the country’s demand for metals. Although industrial activity is slowing sharply in China, the government will step up spending on infrastructure as part of a fiscal stimulus package’.

But will the $586bn stimulus package be enough to enable China to buck the trend as the ‘deficit world’ cuts its demand for China’s exports? Figures for China’s falling exports, falling industrial output, falling property prices, and rising bankruptcies and factory closures suggest otherwise.

If China reacts by relying on a cheaper Yuan to boost exports, conflict with the incoming Obama Administration, also under protectionist pressures, could be on the horizon.

There have been official admissions of the danger of greater unrest as factory closures and unemployment mount and jobless migrant workers return to their villages. Perhaps as an attempt to make the best of a bad job, local officials in Guangdong have seen the wave of factory closures as an opportunity to retool, upgrade, and reorient to the domestic market.

And there continue to be new policy announcements aimed at improving the social safety net for rural communities and migrant workers. As well as the oft-announced and oft-delayed prospect of land reform, there is also an expansion of the rural anti-poverty programme to cover an extra 28m residents: a more flexible pension scheme for migrant workers and a boost for spending on vocational training in rural areas.

As the Financial Times reported last week, there is also help on the way for China’s car industry:

‘The Chinese government plans to support the car industry, the second-largest in the world, with the aim of ensuring sales growth of about 10 per cent in 2009. The move is part of the continuing effort to stimulate the economy and shield the country from the effects of the global economic crisis’. The measures will include ‘cuts in car purchase taxes and incentives for the development of clean fuel cars, to help support the flagging local car market’

Government bodies would be required to buy cars developed by domestic carmakers when making fleet purchases, and Beijing will encourage further consolidation in the domestic car industry, according to a report in an official Shanghai business magazine.. China has 45 carmakers compared with 15 in the US, the world’s largest car market.

Premier Wen Jiabao also announced plans to help the automobile and steel sectors. Beijing also took steps to support the local metals industry, announcing that it will allow tax-free imports of copper, nickel and cobalt concentrate, provided the finished products are exported, according to a statement on the Ministry of Commerce website.