The greatest economic marriage in the world is on the rocks. Unfortunately, history teaches us that the separation is unlikely to be amicable. In 2007, Harvard University history professor Niall Ferguson coined the term 'Chimerica' to describe the interdependent relationship between China and America.
The two countries could be considered a single economy, he argued, with Chinese savings funding American consumption, which in turn powered the mainland's export-led growth.
'For a time it seemed like a marriage made in heaven,' he wrote in his 2008 book The Ascent of Money. 'But there was a catch. The more China was willing to lend to the United States, the more Americans were willing to borrow.'
The result was the leverage-fuelled binge which ultimately led to the subprime crisis and the subsequent global recession.
Now Ferguson warns that the Chimerica partnership is in danger of breaking up under the strain.
In Hong Kong to deliver today's keynote speech at the CLSA Investors' Forum, Ferguson argues that the economic pairing of China and the US is as fragile as any marriage in which one partner saves diligently while the other compulsively spends. When economic conditions deteriorate, tensions are bound to mount.
