Perceptions have certainly changed a lot in the last few months. As recently as three years ago there were so few analysts who were sceptical about the sustainability of Chinese growth that we rarely disagreed among ourselves. Now, however, the group of sceptics has become large enough that there are serious disagreements among us as to what will happen next.
One source of disagreement is about whether Beijing can turn around the current growth slowdown. Some argue that business confidence is so low that it will be all but impossible to get growth up during the rest of this year. They point to the falling demand for loans as proof that Beijing cannot simply force up credit by relaxing loan constraints in the banking system.
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