Can China's economic policy makers maneuver their way out of this one? Let's see: there's a property bubble that's beginning to deflate, a construction boom that's now going in reverse and a financial system that's riddled with bad debts. Oh, and the air is still really dirty.
On the bright side, though, Cirque du Soleil and Segway are coming to China. With the success of the new Asian Infrastructure Investment Bank, the country has established itself as a global economic leader. And the Shanghai Composite Index has more than doubled during the past nine months.
The outside world has a hard time fitting all this evidence together into a coherent picture. Is the stock boom a sign of hope, or a policy-driven bubble? How about that bond default today by state-owned Baoding Tianwei Group — is it an indication of new financial maturity or the beginning of a great unraveling? Is the slowdown in construction, however scary for the world's metal producers, a welcome signal that the economy is moving away from its dependence on exports and infrastructure to more sustainable consumer-driven growth?