There are a number of reasons for the current litany of gloom about China, but the actual state of the economy is way down the list. This is primarily because narrative and emotion dominate facts in the short- and medium-term. The narrative on China has undoubtedly taken on a powerful Geo-Political edge in the last three years, as the US has realised that China’s intentions to move further up the value-added-curve threatened its own economic dominance. Tariffs and incentives to re-shoring were straight from the playbook used against Japan in the 1980s, but the situation with China is very different, not least because of the emergence of the BRICS+ grouping and the powerful impulse to multi-polarity produced by the “freezing” of Russian Foreign Exchange reserves last February.

Instead of merely excluding China from western markets, the US narrative makers are now trying to convince the whole of BRICS+ – which now includes almost half the world’s population – that the US Economic development model is a better one than China’s. Hence, all bad data to be emphasised and all good data to be played down.

In addition, western investors – understandably wary of the risk of investment sanctions from their own governments – have noted political declarations that “China is un-investable” and acted accordingly, with significant outflows in recent months. Naturally, such (dis)investors are keen to hear a good “fundamental” story as to why they were “correct” to have sold. Accordingly, the market narrative-makers have joined the political narrative-makers to deliver a “glass half empty” portrayal. This is the problem with most market narratives; there are positive and negatives and data to support both sides of most arguments, which is particularly true of China. It is so large and so diverse that data can be found to support either a bull or a bear case.