Asia's green shoots allay global slump fears Beijing is taking no risks as the Communist Party gathers for the 10-year power transition next week, the biggest turnover of top cadres since the revolution. The People's Bank has injected a record $61bn (£38bn) into the financial system over the past four days, loosening monetary policy. Zhiwei Zhang from Nomura expects a "sharp rebound" this quarter as companies rebuild depleted inventories, fuelled by loan growth of $250bn a month and double-digit rises in industrial sales. A similar picture is emerging in Taiwan, Korea, India, Indonesia and Australia, where data seem to have either stabilised or begun to turn the corner. David Bloom, currency chief at HSBC, said the Chinese growth scare of the past year has been greatly exaggerated. People have been overly bearish about China, and now they realise they were wrong. It is clear that the country is not weakening dramatically after all. China remains a fantastic economic story. José Ursúa, from Goldman Sachs, says China, India and Brazil are still only halfway through their catch-up phase. They will eventually face a "structural slowdown" as per capita income approaches $15,000 to $25,000 - a variant of what the World Bank calls the "middle income trap" - but there should be another cycle of torrid growth before that crisis hits. Yet opinions remain starkly divided on prospects for China, now the beating heart of the Asian economy. Critics say the most recent phase of China's boom was driven by loan growth, nearly 100pc of GDP over five years. Professor Michael Pettis, from Beijing University, said that China has surpassed the excesses of Japan's Nikkei bubble in the 1980s. "The major difference is that Japan never took debt, investment and consumption imbalances to anywhere near the levels that China has taken them," he said. Credit leaked into property spirals in east coast cities. Much went into industrial plant, pushing investment to a world record 49pc of GDP. This has left a legacy of overcapacity. Most of the country's shipyards and solar companies are insolvent. Mr Pettis expects China's growth rate to halve to 4pc over the next decade as the hangover lingers. This would be a major shock to expectations. China has clearly picked the low-hanging fruit from catch-up growth. The World Bank and Chinese reformers say the export model of the past 30 years is exhausted, but it is no easy task to shift gear and break vested interests. The debate will rage on over whether China's mini-slump this year has been a cyclical hiccup or the start of a deeper malaise, but for now there is no denying the power of monetary and fiscal stimulus. The International Monetary Fund warned over the summer that the world economy was in danger of an "adverse feedback loop" with all major regions stalling at the same time, risking a repeat of 2008. The trade data from Asia have allayed one huge concern but the US fiscal cliff and Europe's debt crisis have still to be navigated.