This is the third in a series of blogs that looks at the risks of a Chinese hard landing. In the first we argued that China still has important defences in the form of fiscal space. In the second, we discussed why the odds of financial crisis are not that high. In this blog, we ask whether China sits on a property bubble, which tend to end in violent and drawn-out recessions.
We are fast approaching the Chinese leadership reshuffle in late 2017. Attention could turn from the current period of relative calm and stability to the medium-term challenges lying ahead. In this context, we are likely to encounter three myths about China’s growth slowdown.
The balance of payments data reading for Q3 shows that capital outflows from China accelerated again. Like wild horses, capital outflows can develop a dynamic of their own. So what are the drivers? Furthermore, is there already evidence of panic and how might policymakers react?
Six years into a bull market and with many equity indices at all-time highs it is understandable that investors are nervous about when the party will end. Unfortunately (or fortunately) predicting the end of a bull market is not as easy as looking at a calendar.