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Why China can still shock US stocks

Teh Eng Koon | AFP | Getty Images

A year after the weakening yuan sounded alarm bells on Chinese growth, the currency's moves have become far less worrisome for global markets even though it may take a while for investors to become more confident China has turned the corner.

"Much of the stability in China has come this year because they're downplaying reform this year relative to stability," said Paul Christopher, head global market strategist at Wells Fargo Investment Institute.

If GDP growth slows further to below a tipping point of 6.5 percent, "then the markets might be worried when China might deliver another deflationary shock to the world," he said.