Once again, financial markets are painting an oversimplified picture of a very complex story. China is being blamed for everything from the recent rout in global equity markets to the next recession.

While China’s scale and cross-border connectivity are not to be minimised, its global impacts are far more subtle. At work is a tug-of-war between two powerful forces: the country’s long telegraphed transition to a new growth model and the necessary development of a robust financial infrastructure.

Contrary to widespread opinion, China is making reasonably good progress on the first count, especially in shifting the structure of its economy from manufacturing to services. These shifts are far more important than the inordinate fixation on headline gross domestic product. A misplaced obsession with the statistical accuracy of total growth misses this crucial point as well.