China: Double, Double Toil And Trouble/Fire Burn, And Cauldron Bubble?

China: Double, Double Toil And Trouble/Fire Burn, And Cauldron Bubble? by Andy Rothman, Matthews Asia

China’s economy is seemingly in turmoil. Markets are down, manufacturing is weak and the government has yet to provide a coherent explanation for last month’s tiny devaluation. Many argue that the economy is descending into policy chaos and a witches’ brew (a hard landing). In my view, however, these are stumbles along the path toward growth rates that are continuing to decelerate (but are still quite fast) from an economy that is increasingly “rebalanced,” with reform and restructuring to continue. This latest issue of Sinology explores the thinking behind this non-consensus conclusion.

The Market

The government’s efforts to prop up the A-share market were clumsy,...