China Record Boosts Confidence This Is No Bubble: Daniel Arbess

Oct. 11 (Bloomberg) -- As the debtor economies of thedeveloped world sputter, the health of China grows ever-morecentral to the fate of the global economy. Yet, the debate onChina’s prospects remains polarized and often superficial, withcommentary either baselessly bullish or derisively bearish.

Reality, of course, is usually more nuanced. China’s modelis unbalanced and its economy has misallocated capital, but itspolicy makers are using the country’s plentiful reserves andpolicy tools to keep inflation under control and growth on asustainable path. China’s growth will probably slow, as itsmodel evolves from depending on exports and investment torelying on greater consumption, but the economy is unlikely toimplode.