Is the Chinese economy recovering from its slowdown at the end of last year? “Yes”, say Gavyn Davies, Goldman Sachs and many others. During my recent visit to Shanghai and Beijing, a number of economists and private businessmen also indicated growing optimism about China’s economic prospects. Why do they think this and are they likely to be right?

China has long been the fastest-growing of the world’s three largest economies — the US, the eurozone and China itself. This is so whether one believes in the official numbers for China’s growth, or is somewhat sceptical about them. Given its economic dynamism and size, when China sneezes, the world economy catches a cold.

That was happening at the end of last year. According to Fulcrum’s “nowcasts”, cited by Mr Davies, growth fell to an annualised rate of 4 per cent in December 2018. This, he adds, “triggered much of the slowdown in global growth, especially in the trade and manufacturing sectors”. Behind this slowdown, it is argued, were the tightening of domestic credit, in an effort to halt the leveraging of the economy during the previous 10 years, and the impact on confidence of the trade war with the US.