China defied the bears this year with an economic turnaround that took many by surprise. But the current strength cannot be sustained and the risk now is that many don’t appreciate how soon growth will slow again. In particular, we think it is wrong to assume that policymakers will keep the economy growing at or above current rates until after the Party Congress late next year. With growth already running at an unsustainable rate and tailwinds from policy easing fading, China’s recovery will fizzle out next year, much sooner than many anticipate.
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