, Columnist
Capital Flight Delivers a Verdict on China
The question is whether a normal slowdown follows or an emerging-market bust.
Headed lower.
Photographer: Xaume Olleros/BloombergThis article is for subscribers only.
China’s growth is slowing, probably for good. But the form that the slowdown is taking isn't yet known. The question is whether China’s troubles will be more like a typical emerging-market crisis, or more like the typical bust in a large developed country.
Every nation undergoes a growth slump at some point. For good background on the phenomenon, check out the papers by Barry Eichengreen, Donghyun Park, and Kwanho Shin. Japan, for example, experienced a slowdown in the early 1990s, followed by South Korea and many Southeast Asia countries in the late '90s. China is simply treading the normal pattern in this respect.