Deutsche Bank, in a recent article 3 notes that a “hard landing” scenario in China is not on the cards and interpret recent evidence as pointing to, at worst, a gradual decline in growth such as has been evident over the past couple of years.
Deutsche Bank argues that while China’s credit/GDP ratio is rising, the inherent advantages of a current account surplus, high net foreign assets (13 per cent of GDP) and low external debt burden (about 10 Per cent of GDP) offer a significant counterweight to the risks of a crisis posed by a high credit/GDP ratio.