ML-Implode News - China's economy: hard landing or welcome rebalancing?

... the sharp decline in exports is to be welcomed as a sign that the rebalancing is working. But some analysts believe it is the latest sign that something is badly amiss. Erik Britton, of City consultancy Fathom, says its analysis, based on rail freight, electricity production and bank lending, suggests growth is running at closer to 3% than the 7% or so suggested by official GDP data. "China is in a hard landing now," he says. "They have faced a situation where their previous growth model is not working."
He points out that house prices are declining at 6% a year, compared with double digit growth a year ago -- similar to the kind of reversal that plunged the US into the sub-prime mortgage crisis. Furthermore, banks are saddled with non-performing loans and industries are struggling to tackle overcapacity''

He believes China will eventually have to accept a drastic depreciation in the renminbi, of perhaps 25%, in order to regain competitiveness and prevent a crash.

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China's economy: hard landing or welcome rebalancing?