Brad Setser (his bio here) has written a sensible and easy-to-understand analysis on how the current financial crisis might impact China. (H/T to Bill Bishop, who if you use Twitter you should definitely follow, as his frequent links to stories, both in English and Chinese, are almost always worth reading). I know this isn’t a post directly about interactive marketing, but a good macroeconomic read’s good for us now and again, right?

We’re all aware that China’s vaunted exports have fallen off rather precipitously in the last quarter, but that, accoring to Mr. Setser, isn’t what’s particularly worrisome:

The world economy could really use a Chinese locomotive. But it increasingly doesn’t look like it will get one. A recent Credit Suisse report noted that the latest purchasing managers survey suggests that China is about to enter a manufacturing recession. Export orders fell sharply – as one would expect. But import orders fell more. If that proves an accurate guide to China’s demand for the world’s goods and services, China won’t be doing much to support global growth.

He goes on to make a persuasive and, frankly, chilling case that those of us who’ve believed ourselves to be well insulated from the downturn here in robust China should read. It’s a good antidote to the “hey, we can just stimulate consumption and all will be well” mentality, and to the blithely optimistic here who believe that China can somehow ride in on a white charger agleam in chrome plate armor and rescue the world. (Neither are views held by Beijing’s economic planners, to be sure).