To an extent, slower growth is policy induced by the Chinese authorities as they aim to reduce vulnerabilities from rapid credit growth and make a transition from an investment-led economic model. What needs to be seen is whether China makes a soft landing and what are the implications for the rest of Asia.
Any policy move by China to ease monetary policy will have ripple effect across the Asian region. As regards capital flows to the EMDEs, the Institute of International Finance (IIF) expects 2015 could be another stressful year for capital flows to emerging markets.