Oppressive heat and humidity in my part of the country finally broke this week in a giant storm that, despite its destructive power, came as a relief. In some ways, the global economy feels as if it's waiting, too.

Climbing stock markets notwithstanding, many have recognized an ominous feeling of escalating pressure that may need a crisis to bring things back into balance. Some commentators, including billionaire investor George Soros, have hinted that China is ready for a storm.

"I think there's an eerie resemblance of what's happening in China to what happened here leading up to the financial crisis, 2007-2008," Soros said during an Asia Society event in New York earlier this year. "It's similarly fuelled by credit growth and an eventually unsustainable expansion of credit."

China not amused

China has said the upcoming G20 summit in Hangzhou, China, will focus on the world economy, and not the controversy over its activities in the South China Sea. But there are widespread concerns that China's debt-based economy could face a reset, something that could affect the entire world. (Reuters) China was officially not amused, responding to the various warnings of the billionaire — who made a large portion of his fortune betting against the British pound — with a blistering editorial in the People's Daily titled " Declaring war on China's currency? Ha ha ."

Of course, Soros is by no means alone in worrying about the stability of China's economy. Late last week, the International Monetary Fund, with nothing to gain by driving the Chinese currency up or down, echoed the billionaire's remarks.

The IMF expressed concern about "unsustainably high growth targets," the danger of companies defaulting on loans and ultimately "a hard landing" for the entire Chinese economy.

'Dangerous trajectory'

"While reforms have advanced across an impressively wide domain, they have lagged in some critical areas — especially on state-owned enterprise reform and tackling excessive corporate debt," James Daniel, IMF mission chief for China, said in a conference call. "As a result, vulnerabilities are still rising on a dangerous trajectory."

Prime Minister Justin Trudeau is greeted by Chinese President Xi Jinping as they take part in a bilateral meeting at the G20 Summit in Antalya, Turkey, last November. (Canadian Press) China is preparing to host a gathering of the G20, the world's 20 most powerful global economies, and Prime Minister Justin Trudeau is expected to visit the country later this month in advance of the summit.

China is insistent the subject of the meetings on Sept. 4 and 5 will be the world economy and not what many consider its increasingly belligerent claims in the South China Sea.

"The Hangzhou summit must focus on economic issues," vice-foreign minister Li Baodong said Monday. "This is what people want to talk about most at the summit."

There's no question China is a power that cannot be ignored. Only decades ago, its increasing economic clout was based on cheap labour, but no longer. The country has become a science and innovation leader and as labour costs rise, it's investing heavily in robotics.

Keeping the dream alive

But in some ways its enormous economy is an ad hoc mess as factions within the country experiment to try to keep the economic dream alive. Its political system, still so dependent on the personal power of individuals, has yet to reach equilibrium.

Sometimes it's hard to know who is making each new economic decision.

China is becoming a world leader in innovation. In this photo, buses are topped with solar panels. (Reuters) So far China has done a brilliant job holding it all together, but it's not uncommon for countries to stumble from the growing pains that lead to economic greatness. The South Sea Bubble back in the 1700s might be thought of as Britain's initiation into economic hegemony. The U.S. had its stock market crash in 1929.

Of course, some countries seen as the next big thing don't actually make it. Soviet Russia was praised and feared as a coming power but collapsed decades later. In the 1980s, Japan was seen as the country to imitate in all things economic, but after the "lost decade" of the 1990s, the country seemed to have lost its way.

Faint reassurance

Current gloom about the Chinese economy is widespread enough that yesterday Henny Sender at the Financial Times felt compelled to write a piece entitled Is the gloomy outlook on the Chinese economy overdone? which concluded with the faint reassurance that "at least the worst possible outcome is no longer a given."

The entire world economy feels as if it's in a strange and unstable place. Interest rates are so low that many are now negative. Despite denials, the world seems to be increasingly in a liquidity trap where new injections of central bank cash do little to stimulate the economy.

And yet higher rates would be so disruptive to bond markets that governments and their central banks seem paralysed.

It may be that the world needs a shock, a clearing of the air, an economic storm to reboot the world economy and start things growing again on a new footing. And scanning for possible places for such a reset to occur, China is one eminent candidate.

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