Forty-six percent of fund managers surveyed by BAML view a sharp slowdown in China as their biggest worry, up from 37% last month, and 26% in December.
"China is getting serious about deleveraging,” wrote SocGen earlier this week in a report nicely summarizing the conventional wisdom. “This should make economic growth slower, but more balanced. There is a risk, however, that deleveraging gets out of control and leads to a hard landing, in which growth slows to 2% Y/Y at the trough.”
Paul Chan, CIO for Asia ex-Japan at Invesco, isn't buying it, noting predictions of a hard landing in China have been going on for several years. “A hard landing in 2014 for a country with the largest foreign-exchange reserves and the lowest government debt-to-GDP among major economies is highly unlikely ... Based on trade, capital flows and liquidity data, investors so far are willing to fund loan growth in China.”
This just in: After a sizable decline to start off 2014, the Shanghai Composite has been headed higher for the last month, up 1.1% last night and now in the green for the year.