If that market gets tougher, if some sensitive sectors get more difficult to penetrate, they're in trouble. I'm sure I don't need to go through them again, but there are potential shocks from Japan over the next probably at least two years. China is a potential source of shocks. Well, the problem is that the rosy expectations of a short-term Chinese future go against a couple of inconvenient facts. One is that the Chinese economy has been in a sort of autonomous slow-down now for nearly three years.
Inflation is zero and by some measures is now going backwards as negative.
One reasonably good proxy for economic activity in China is the profits of listed Chinese companies, listed in the Chinese markets as well as Hong Kong. Over the last two years they've collapsed by 80 to 85 per cent. Well, the Chinese have promised not to devalue the currency because they know that that would produce an immediate second round effect of currency devaluations through the region. There's no obvious way out of this dilemma. The Chinese haven't nominated one.