Arguments about China’s growth prospects are often muddled by the divergent perspectives of optimists and pessimists. The two groups tend to use different time horizons, and to focus on different concepts, in evaluating China’s chances for success.

Those shorting China are fixated on what is happening today and what will happen six months from now. Thus, the steady decline in the monthly purchasing managers index — which measures changes in the manufacturing sector — as well as disappointing industrial production numbers have inevitably given rise to predictions that GDP growth will continue to sink. China’s GDP growth rate has fallen more-or-less steadily since the financial crisis, and bearish investors expect further declines from last year’s 7.4 per cent in the absence of additional stimulus and more aggressive actions. Such actions could include the recent cut in bank reserve requirements by half a percentage point or a likely decline in deposit rates.

Read more at: http://carnegieendowment.org/2015/02/10/debating-china-s-growth-exceptionalism/i1zv