What's that loud noise they don't want you to hear? It's the screeching slowdown of China's economy.

China's government and a number of talking heads on CNBC will have you believe that China will somehow manage to escape the global recession. By magic. They are just such a "powerhouse", they will pull the West out of this recession. Right. Here is a story on Taiwan. A quote:

"Export-dependent economies across Asia have been roiled by the worst global slump since World War II. Japan’s economy shrank at a record 15.2 percent annual pace in the first quarter, data showed yesterday. Hong Kong’s GDP shrank 4.3 percent last quarter from the previous quarter, the biggest drop since 1990.

A report tomorrow may show Taiwan’s unemployment rate climbed to 5.84 percent in April from 5.72 percent in March, according to a survey of economists."

Yet somehow China is different? Maybe it's the half a trillion stimulus package that will keep them afloat. That assumes the stimulus rapidly and efficiently flows through China's economy. Really? Their banking system is notorious (see story) for lending to money-losing businesses and frothy real estate projects - often because the government tells them to do so. Sure you can grow on momentum for a while. But it looks like an artificial lag. The screeching slowdown is inevitable.

The chart below shows the GDP comparison of HK, Taiwan, and Japan to that of China. China's economy can NOT be this insulated, not just from the West, but from it's key neighbors as well. Unless of course it's government is cooking the numbers, which is a possibility. Look out- a major drop in China's GDP is on it's way.