China Hard-Landing Concerns Grow, But Still Seen As Tail Risk

While most investors still expect the Chinese government to navigate its inflated GDP growth rate and cool the economy down gradually, a recent Societe Generale survey found that there is more concern about the tail risk of a hard landing.

“In our core scenario, we see Chinese growth decelerating gradually - though at a slightly faster pace than the consensus anticipates - to 5.5% by 2018,” writes Societe Generale head of research Patrick Legland.

Half of China's GDP growth from capex

The main challenge that Legland sees facing China is that it is still getting nearly half of its GDP growth from capex, and a lot of that...