There are fears surrounding China on almost every front. Weaknesses are perceived regarding its gross domestic product (GDP), investment, its currency and capital outflows. The data on employment is thought insufficient. The positive current account is seemingly built on weaker imports. The level of truly impaired loans is uncertain.

Our own views are rather less alarmist.

Regarding the currency, we do believe the People's Bank of China (PBOC) now favours a relative stability of the yuan over further appreciation, but cannot conceive of a political desire to devalue/depreciate the currency. The PBOC wants to turn the yuan into a convertible currency, which will mean increased volatility.