China Hard-landing?

 The tension in China's tightly controlled foreign-exchange market reflected worries about a hard landing in China and efforts by Beijing to keep the yuan on an upward trajectory, a stance favorable to the U.S. and one that could add some stability to international markets rattled by Europe's debt crisis.

To some, it could be an early indication of a swing in the tide for China's currency.

China's currency is still broadly considered undervalued, and investors largely believe Beijing will continue to guide it gradually higher versus the dollar over the long term. But some increasingly believe the yuan could have occasional bouts of depreciation if global markets become turbulent and spooked investors flee to the safety of the U.S. currency.

"Despite the tendency of keeping the yuan stable during (periods of) financial turbulence, changing economic fundamentals suggest the likelihood of yuan depreciation is now much larger than in 2008 in the event the dollar strengthens sharply," said Cui Li, chief China economist at Royal Bank of Scotland.

Ms. Cui said the foundations supporting further yuan appreciation have weakened: China's external surpluses have narrowed, the yuan's real effective exchange rate is rising at a faster pace compared with other emerging markets, and the nation's international creditor position has moderated.  --------Source

Meanwhile, we need to notice some parts that can be easily ignored but weigh importantly in China economy:

- Failure of small and medium sized businesses, their local government debts problems

- Increasing relying on underground credit market which results in money withdrawn from the formal banks

- Recent weakness in copper commodities market, also gold of course

- Development in the real estate is getting weaker. But this is mainly due to one of China inflation cooling policies.

-  CDS for Chinese banks are surging

-  Equity markets are still wiped out in the years to come,

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But from Chinese economist's perspectives, China still has some advantages compared to "other countries" and their polices does play a significant role in lots of ways. If there is a hard-landing, China/Chinese experts would definitely present enormous reasons to say "Hey, No Worries".