There’s no problem in China, just a transition?

“China is a transition economy, certainly China has a lot of structural internal problems, however I think the deceleration since the beginning of 2010 is mainly due to external and cyclical issues,” according to former senior vice president and chief economist of World Bank Justin Yifu Lin who also sees a “lot of opportunities for economic growth in (2016) despite weak outside demand.”

The Chinese government has taken a reassuring stance towards investors following the two trading halts of the country’s stock markets this week amid fears of further economic growth slowdown. Between the two halts, China’s central bank (PBOC) conducted 7-day reverse repurchase (repo) agreements worth 130 billion yuan in an effort to ease a liquidity strain. Also, “faced with the speculating forces, (we have) the capabilities to keep the yuan basically stable at a reasonable equilibrium level,” the PBOC stressed.