FT: Can macro policy easing still rescue China?

Assets have slumped on misplaced fears that a recession is likely. -------------------- Since the peak in late January, Chinese asset prices have strongly underperformed their global counterparts. The equity market in local currency terms has fallen by a quarter compared to the US market, corporate bond defaults have rattled the fixed income market, and the RMB/$ rate has dropped by 8 per cent. It seems clear that a China-specific shock must have been to blame. Many economists claim that the Chinese authorities no longer have the macroeconomic tools available to address rising recession risks caused by domestic deleveraging and foreign trade wars. They believe that fiscal and monetary policy may be out of ammunition. However, pessimists have been worried before in similar circumstances, and China has always been able to cope. The same is likely to be true once again in 2018/19.