China: the usual worries but no boom or bust

IN SOME ways, I find analysing China amusing. First, as long as I can recall, numerous commentators have been calling for a Chinese hard landing. And for as long as I can recall, they have been wrong. Second, Chinese economic data has been running hot and cold for years, but each meaningless wiggle sees a breathless media (and sometimes an over-the-top market) response. Finally, the Chinese authorities themselves seem to sometimes add a bit of confusion: the People's Bank of China (PBOC) is about the most opaque major central bank there is, and numerous motherhood policy statements about "prudent monetary policy" and "deepening economic reforms" don't help.

So the perpetual China worry list remains, and recent Chinese data has been on the soft side. But last year Chinese shares were among the world's strongest. What gives? Is China on the brink of a boom or a bust? Probably neither.

Realising that last decade's 10 per cent-plus growth was not sustainable, the Chinese leadership has been engineering a downshifting in growth to a sustainable pace. Most of the growth slowdown occurred over 2010 and 2012.