China's economic slowdown is just the beginning. This is part of the grand restructuring plan that has to go through. The persistent weakening of the CNY, a bubbling domestic bond market, and an erratic stock market shall continue to prevail this year. But what many have not seriously considered about is the heightened determination of the state to allow loss-making enterprises to go bankrupt. Such "surgery" is aimed at alleviating the problem of overcapacity. This will likely happen this year and will weaken growth further. 

The situation would resemble the laying-off of millions of SOE workers endorsed by then-Premier Zhu Rongji during the heights of the Asian Financial Crisis in 97/98. The impetus of reform has always been the strongest amid the coexistence of an internal crisis and an external crisis. These conditions are being met once again internally, via a self-engineered slowdown led by anti-corruption efforts; and externally, the global environment is still very fragile. 

The key difference is that, while the CNY exchange rate was kept stable in the nineties, it will be allowed to shoulder as much as economic malaises as possible this time round.