by Donatella Saccone, Università di Torino
This past Summer, the financial world was repeatedly unsettled by the turbulences on the Chinese financial market. Rising on June and bursting over three chaotic days of August, the equity crash impacted on all the main international stock markets. Nowadays, in the middle of Autumn, data confirm the suspect of a persistence in the slowdown of the Chinese economic growth. Even if China is growing at a still impressive rate of 6.8%, it seems that official data are trying to hide a deeper downturn in the rates of growth, in any case below the usual extraordinary levels.
What is certain is that China’s government is implicitly confirming these signs of economic and financial weakness by adopting, for the first time, measures markedly breaking with the past: the three consecutive devaluations of the yuan last August, the recurring cuts of interest rates, the reduction of bank's reserve requirements and, just few days ago, the relaxation of the one-child policy, have all been examples of huge attempts to adjust structural problems that are no longer sustainable.
How much these signals of crisis can be perturbing and persisting is object of an intense debate among analysts and economic actors. Without claiming to be complete, this number of Emerging Economies tries to partially answer this question by fitting together some pieces of the puzzle. An overview of the Chinese economy in historical perspective is provided by Mario Deaglio, who underlines the main economic and social unbalances and discusses the new wind of change brought by the current ruling class. Vittorio Valli comes straight to the point, by wondering about the existence of a crisis in the Chinese financial market and looking at the long run developments, while Alessia Amighini and Andrea Goldstein examine the draft of China's 13th Five-Year Plan in the light of the economic slowdown. The fragilities of the financial sector are highlighted by Roberto Ippolito, according to whom debt represents the main source of concern. Finally, Lino Sau comments the recent devaluations of the yuan and points out the risk of a new global currency war.
Besides the different points of view from which the authors observe the recent facts about China, there is a common thread: they all agree that it is too early to say whether these facts are just transitory difficulties on a glorious path of growth, or rather the feet of clay of a stumbling giant. The only certainty is that reliable forecasting on the future of the Chinese economy cannot be done without taking into account its own specificity, for better or for worse.
