Are fears of a hard landing for China’s economy valid?

When China’s customs bureau reported a trade deficit of $31.5 billion in February, concern grew that the economic superpower is on course for a “hard landing.”

But, some noted, one month does not a hard landing make.

“The deficit has fuelled one fear and one hope. The fear is that China’s economy will slow sharply, hobbled by declining exports to crisis-racked Europe and a rising bill for commodities like oil. The hope is that China is rebalancing, moving away from an economic model reliant on foreign demand. Neither the hope nor the fear is wholly justified by this month’s figures,” notes The Economist.

This view has been echoed by Edmund Harriss, a portfolio manager at Guinness Atkinson. “The Chinese economy is a lot more stable than the investing public is giving it credit for. Saying that Chinese banks are about to keel over is simply not true,” he tells Forbes magazine.

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