The former US Treasury secretary Lawrence Summers and his Harvard colleague Lant Pritchett recently delivered a reality check on the Chinese economy's prospects by publishing a study indicating that China's growth will average only 4 per cent a year for the next two decades. At the same time, the Conference Board issued its study with similar conclusions.

The Summers-Pritchett study is a statistical exercise drawing on cross-country experiences, which is then applied to China (and India). The Conference Board projection is China-specific but makes some debatable assumptions about the lack of reform. It also discounts quality and productivity increases while coming up with its slow growth scenario. In contrast, staid institutions such as the World Bank and International Monetary Fund foresee annual growth rates closer to 7 per cent for 2020 going down to 6 per cent by 2025, and one must not overlook the pessimists who see an imminent financial crisis with growth collapsing.