By James Saft
(Reuters) – (James Saft is a Reuters columnist. The opinions expressed are his own)
In a world in which investors increasingly assume policy-makers have their backs, China may be about to demonstrate how it can work the other way.
Chinese growth is decelerating sharply from sky-high levels, with August industrial production slipping to a 6.9 percent growth rate not seen since the crisis year of 2008 amid a broad-based slowdown in the kind of fixed investment which has traditionally powered its economy.
This makes the official government target of 7.5 percent annual economic growth look a vain hope, with economists rapidly ratcheting down their forecasts.
Yet despite this, there are signs that China will refrain from wholesale stimulative moves to jumpstart growth, a policy it has followed in past growth lulls and one which many investors have assumed acts as a sort of ‘get out of jail free card’ backstopping their speculations.