Global prospects are gloomy, stagnation has set in, and in the eye of the storm sits China.[Special coverage]
Once the bellwether for global growth, China has increasingly found itself under the microscope after domestic markets experienced severe fluctuations. Yet, despite proclamations to the contrary, no crash materialized and the economy has maintained momentum.
However, this has done little to quell the storm whipped up by naysayers, who think they have plenty more reasons supporting their notions: local credit splurge, overcapacity, factory activity contraction, foreign trade dive, and money outflow.
Critics of China have pontificated on these shortcomings the world over, especially as China's national legislature meets this month to hammer out a blueprint for economic and social development in the coming five years.
The mood at home, however, is not so downbeat.
Premier Li Keqiang, in his government work report on Saturday, called China's economy flexible and resilient. After all, the country has huge foreign exchange reserves, low budget deficit, and the huge potential of urbanization.
Finance Minister Lou Jiwei, too, is confident, saying China has "enough policy tools and huge space for reform" to sustain medium-high expansion and achieve over 6.5 percent growth this year.
Can China make good use of those tools?
China's economic woes are no worse than other economy. So why all the pessimism?
The bottomline is that many economies have a biased distrust in China's ability to cope with the economic malaise.
When President Xi Jinping launched an anti-corruption drive three years ago, there were murmurs that an extensive anti-graft campaign would undermine economic growth. The logic was driven by the belief that the secret to doing business in China was "preferential policies."
The anti-graft campaign, in fact, can be used to illustrate, and understand, Xi's economic governance philosophy, which is to clearly define the roles of the market and the government.
China is keen to learn from its Western counterparts, especially when trying to resolve complicated problems, such as the middle-income trap in next five years.
Rather than taking the unsustainable route of printing money, China will follow a path of supply-side structural reform, which has been, tenuously, compared to the Reaganism of the 1980s.
China has intensified efforts to create an open, fair environment for innovative ideas, which will help ineffective sectors.
To do this, policymakers must walk a fine line between preventing systematic risks and reducing overcapacity while at the same time avoiding a credit bubble.
China pledged to create 10 million more jobs and will extend financial assistance to workers that lose their jobs as a result of restructuring.
The adjustment is "tough, but correct," says Axel Weber, chair of UBS Group AG. The real test lies in China's resolve to push reform forward amid global recession.
China may be on an uphill journey, but it has taken a first step in the right direction.
