Industry experts see a silver lining around the Chinese economy despite fears of a hard landing.
Those in the optimistic camp at the sixth China Capital Markets Conference held here last week noted there are signs of recovery.
Mr David Mann, managing director and chief economist for Asia at Standard Chartered Bank, said in his keynote speech that financial markets this year had been driven into a tailspin, partially because of concerns that China was deliberately devaluing its currency.
However, he attributed the panic to policy miscommunication, and that better communication by the Chinese central bank should ease fears of currency devaluation.
Mr Mann later told The Straits Times that the central bank has other tools at its disposal so "a sharp depreciation is unlikely to happen" as such a move would drastically outweigh the potential benefits.
"The yuan is likely to be stable against a currency basket, at least before the G-20 summit."
Mr Mann noted that observers focus on "China's old economy, leverage and overcapacity", ignoring positives such as the huge growth of its working-age population with a university degree, which is estimated to grow to 27 per cent by 2030.
This growth would likely effect a huge transformation in terms of value-add, he said.
Mr Mann also had a positive view on the increasing number of bond defaults by state-owned companies.
"We are seeing something that should be welcomed, which is pricing according to risk... Part of our view is that we will see more of the market trading in a more credible fashion."
Mr Ming Ming, chief analyst of fixed income, currencies and commodities at Citic securities, also said at the event organised by the Asia Securities Industry and Financial Markets Association thatChina's economy was recovering in the short term, citing a sharp rise in infrastructure and housing investment in the first quarter this year, compared with last year.
Like Mr Mann, he emphasised that Chinese policymakers were focused on meeting the growth target of between 6.5 and 7 per cent this year, which would demand more prudent monetary policy.
But in a separate panel, Mr Gordon Chang, author of The Coming Collapse Of China, disagreed, saying that most of this year's growth was generated from Chinese lenders and spending by the authorities.
"I think we shouldn't be celebrating the abandonment of reform and spending.
"They are creating debt probably four times more than they are creating nominal gross domestic product when you look at the reality of it," added Mr Chang.