China Shakes off Policy Paralysis With Financial Reforms

BEIJING — An emerging consensus holds that domestic price bubbles and the high degree of nonperforming loans littered throughout China’s financial system represent imminent threats to China’s continued economic rise. However, doomsday evocations of a Chinese crash ignore the fact that, if and when a day of reckoning arrives, China may be able to use its sovereign wealth to engineer a soft landing, thereby avoiding the more-apocalyptic scenarios often predicted. Indeed, a controlled bust may even yield benefits by moderating subsequent growth, and many analysts remain bullish on China’s long-term fundamentals. This market sentiment has been buoyed by recent evidence […]

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