The badly handled crisis at the stock markets and the unfortunate devaluation of China´s currency are still casting shadows on the country´s financial future, says economist Arthur Kroeber at CNBC. At this stage it is very unclear whether the central government has the capability to handle needed financial reforms.
In addition to the increase in debt, China’s missteps this year in the stock market intervention and shock currency devaluation raise questions on the leaders’ ability to steer the economy towards growth.
“They have all the ingredients to execute a successful transition,” said Arthur Kroeber, head of research at Gavekal Dragonomics. “The question is whoever is making decisions, does he know what he is doing? Leadership wants to execute this in a highly centralized way and we just don’t know if that can be done.”