China can handle collapse of speculative inflows
Marshall Auerback here. This will be short, but I felt compelled to post with my views on China.
There was clearly a bubble in exports in the past four years, with exports serving to cover capital inflow (overinvoicing must have been a big part of that). So this is just part of the overall collapse of speculative capital flows, and not so much a decline in real effective demand. China can handle this, the population is not constrained by either income or debt.