Terry Smith: China may fall over in 2011

Fundsmith founder Terry Smith says China is the story for 2011 and warns the economy could be poised to 'fall over'.

The City financier says China has inflation and clearly elements of a property bubble, with ghost towns in both housing, retail and shopping. He says China's capital goods imports are also larger than that of the US, the eurozone and Japan combined. "So if it does fall over, it will definitely make a very loud bang," he says. Smith argues in the 1980s, people thought Japan would always remain an economic powerhouse, similar to the belief the Tiger economies could not be held back in the 1990s. Smith says: "Both of them came to a grinding and rather spectacular halt shortly after...