There are few mysteries more confounding to the modern investor than the Chinese economy. Official statistics are so mistrusted and government intervention so rampant that analysts can’t agree on how fast the economy is growing or whether shifts in economic activity are evidence of private-sector strength or bureaucratic meddling.
Last summer’s 40% decline in the Shanghai Composite stock index, followed by steadily declining official growth statistics, has added credibility to the argument that China’s economy is a punctured bubble, inflated by debt and government-sponsored investment and quickly heading toward collapse. This week there was more bad news, with the private Caixin/Markit Manufacturing Purchasing Managers’ index falling to 49.2, indicating that the Chinese manufacturing sector is in contraction. Cue widespread panic over China and emerging markets in general.
But as much as this “hard landing” theory has gained adherents over the past year, a collapse has yet to come. Carl Weinberg, chief economist at consultancy High Frequency Economics, calls for a little perspective when it comes to the country. The indicators that bears find so damning (industrial sector stagnation) can also be interpreted as evidence of an economy experiencing a humdrum cyclical downturn and of China’s transition from a manufacturing-based economy to a wealthy, services-driven one. “What G-7 country wouldn’t trade its growth rate for China’s?” he asks, pointing out that even the most pessimistic estimates of Chinese GDP growth are twice that of the U.S.
Meanwhile, there are encouraging signs from credible sources that China’s economy is still strong. One stunning sign of how much cash China’s economy is producing is the fact that the country continues to export $1 trillion in capital a year. That means Chinese investors are buying in foreign assets roughly what the entire Mexican economy produces each year. If only the rest of the world had similar problems.
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A version of this article appears in the June 15, 2016 issue of Fortune.