Threading the Needle of China's Economy

At the beginning of the year, investors worldwide were in a panic over the Chinese economy. Cast your mind back to January, when U.S. and European markets were convulsing daily in response to the latest news or rumor out of China. Five to 10 percent daily moves in the Shanghai Composite Index were common. Dollars were hemorrhaging out of the government's coffers at a rate of more than US$ 100 billion a month, exciting fears of capital flight and reserve exhaustion. More than a few so-called experts ominously warned that China's economy was crashing.