The shift in sentiment has been dramatic. Some of those attending the recent World Economic Forum meeting in Tianjin, a fast-growing port city half an hour by high-speed train from Beijing, were struck by the note of pessimism and cynicism about China’s prospects.
It is all a marked contrast to the feeling in the immediate aftermath of 2008’s financial crisis that China could single-handedly pull the developed world back from the abyss. And it begs the question of whether economists and investors are being as irrationally gloomy as perhaps they were overly optimistic before. It matters because no one wants to be the dumb foreigner backing the China miracle even as the country’s own residents are heading for the hills.
One reason to believe the pessimism may have been overdone is the traditional investment splurge that has followed leadership transitions ever since the new market-oriented regime began following the death of Mao in 1976.
