Predictions 2013
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Predictions That Went Wrong in 2012

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No Hard Landing

Several months of growth deceleration in China, alongside a slump in the country's housing market, gave rise to speculation that the world's second-largest economy was headed for a so-called hard landing in 2012.

At the end of 2011, notable investors including hedge-fund manager Jim Chanos and Marc Faber, author of the Gloom, Boom and Doom Report, pointed to the probability of a hard landing in the mainland. Chanos was also quoted in the media saying the scenario was already playing out.

Economic data during the first nine months of the year, when growth averaged 7.7 percent -- a far cry from the explosive, double-digit growth rates seen over the past decade -- kept investors on high alert. In the third quarter, GDP even fell below the government's annual target of 7.5 percent, hurt by weak demand from abroad and flagging investment at home.

But green shoots have since begun to spring up in the economy, and together with a smooth leadership change in November the rhetoric on China has turned positive. Latest data on manufacturing and the housing market together with a pick-up in exports are signaling the economy has escaped the risks of a hard landing. Experts are now predicting growth will pick up strongly in the fourth quarter to over 8 percent.

With the new leadership under Xi Jinping signaling economic reforms and policy measures to ensure stable growth going forward, talks of a hard landing for China are dying out.

Photo: AFP | Getty Images