Don't panic: Why the Chinese economy will (probably) be just fine

Is China headed toward a bust? Or are its troubles part of a larger transition?

Chinese economy
(Image credit: AP Photo/Shizuo Kambayashi)

Back in early July, China's stock market rattled the global financial world by taking a nosedive that wiped out a third of its value. But the plunge came after a remarkable run-up in the major Chinese stock indexes, and even after the drop they remained well above their pre-2014 level. The Chinese government also threw the kitchen sink at the problem, and the dive appeared to peter out.

But what it didn't do was reverse the dive. Fast forward to last week, when China's main stock index fell 11.5 percent — to nearly the same low it reached at the depths of the July plunge — freaking out global financial markets all over again.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.