Fears of a China meltdown overblown
The recent sell-off was an overdue correction of its asset market and reflects the frictions from economic rebalancing and liberalisation rather than weak economic fundamentals.
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MANY observers believe that China is in a financial and economic meltdown. Such a concern is causing anxiety and panic everywhere. China is the world's second- largest economy and largest trading nation. Given its growing economic influence around the world, bearish observers clearly think that when China sneezes, the rest of the world may catch a cold.
But what do the facts tell us about this gloomy narrative?
Essentially, there are two kinds of financial crisis:
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