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(61,482 posts)
Wed Dec 31, 2014, 01:47 AM Dec 2014

China watchers see soft landing for economy in 2015

HONG KONG (MarketWatch) — For years now, China has been haunted by the spectre of a possible “hard landing,” with fears including a financial collapse and bad-debt crisis, crippling deflation and sharp drop in economic growth that could lead to political instability.

But listen to some of the financial community’s top China-focused analysts, and the situation doesn’t sound so dire.

Yes, the government’s efforts to balance reform with growth may exert a downward pressure, but it will be a “soft landing,” a moderation rather than an outright contraction, with prices to remain stable, or so say the analysts.

Société Générale economist Wei Yao is one such voice predicting a manageable deceleration, describing it as the “new norm,” with “slower economic growth but of better quality.”

While she sees reforms as weakening the government’s long-standing backstop for the economy and markets, “thus adding downside risk,” she also sees Beijing as willing to “mitigate the pain” of such reform via stimulus.


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