A matter of when, not if the iron ore price will tumble, says leading China economist | The Business

Professor at Peking University and Senior Fellow at the Carnegie Endowment, Michael Pettis says he has a warning not many Australians will be happy to hear: the price of iron ore will dive. He says : "It could happen in two years, it could happen in five years," but eventually it will happen. Michael Pettis says China is over-investing in manufacturing and debt is growing. He says at some point, that will have to stop and when it does, and investment in property and infrastructure dries up, that will be "terrible for iron ore." Michael Pettis joined Kirsten Aiken on The Business on the sidelines of the UBS Australasia Conference in Sydney. He also said the recent US China trade agreement does not resolve the deep and long running trade dispute between the two countries. He says the US trade deficit continues to expand as does China's trade surplus, so the pressures aren't going away and they haven't been resolved.
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