China bears feast on a daily diet of negative headlines ranging from data manipulation and funding stresses to misallocated credit, unrest in remote provinces, and the inevitable prediction of a ‘hard landing'.
At face value, it is easy to understand the scepticism. China has slowed from 12% to 7%. Inflation has halved. China’s A-shares are down 40% since the start of 2010. Yet the constant pessimism about China reveals myopia, prejudice, and lack of imagination. The best way to understand China today is to consider the global context. The world economy is in a state of extreme disequilibrium. Never have so many countries printed so much money with so little impact on inflation. Never has so much debt been issued at such low interest rates. Formidable structural challenges sustain these dise...
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