China’s Currency Rebounds as Economic Optimism Returns<br />The stock market has begun to recover from its rout two years ago as rising real estate prices reassure investors about the health of China’s developers,<br />and resilient economic growth suggests that corporate profits may rise.<br />Other signs point to China steadying its course after a stock market crash<br />and surprise currency devaluation two years ago shook the financial world and brought the country’s long-term problems to the fore.<br />In terms of his earlier worries about China’s debt, he added, “I’m having doubts about what I believed as well.”<br />The currency, which is one of the main ways the government controls the economy, is a gauge of the country’s health<br />and a source of tension for the United States and other trading partners.<br />As recently as May, Moody’s Investors Service, a ratings firm, lowered its credit rating<br />on the country’s debt, saying China’s spending spree would hurt long-term growth.<br />While China keeps a tight grip on the value of its currency, it allows the renminbi<br />to move up or down by a certain amount in its local currency market.<br />“There is no bank that is going to say in November that, ‘our economic outlook is not<br />good, we’re going to contract our loan book.’ They can muddle on for a while.”<br />But Ms. Chu and others see Beijing’s efforts as stopgaps: If it does not address its debt, China risks a long period of low growth, as in Japan.
