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What might trigger a hard landing in China?

Structural headwinds will weigh on China’s growth rate over the coming decade. If well managed, this slowdown will be gradual. But a more abrupt adjustment shouldn’t be ruled out. We see two main threats – political instability that disrupts economic activity, and a policy misstep in the face of rising bad debt that causes interbank markets to seize up and precipitates a financial crisis.

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