Chinese policymakers are aware that economic growth fueled by credit is unsustainable. To remedy that, they are making efforts to deflate the credit bubble. This is expected to cause the world's second largest economy to slow modestly in what's been dubbed the soft-landing scenario. In 2013, China grew 7.7%. But "government efforts to engineer a deleveraging could lead to a hard landing in China, if the policy response is misjudged," writes Societe Generale's Wei Yao. In this scenario, year-over-year growth could collapse to just 2% and global growth could be cut by up to 1.5% in the year after the hard landing. ... (full story)