Visiting Chinese President Xi Jinping on Tuesday called for the world's two largest economies to read each other's strategic intentions correctly and manage their differences properly and effectively.

In 1997, at the height of the East Asian currency crisis, I wrote an article, “The Sky is not Falling (天塌不下来),” basically saying that the Chinese economy would be able to emerge from the crisis more or less unscathed.

Chinese President Xi Jinping defended his government’s economic stewardship and said that China’s slowing growth and market fluctuations won’t deter needed reforms.

While China’s National Bureau of Statistics’ (NBS) reporting on GDP growth grates have been called into question by international observers, there is acknowledgement that the structure of China’s economy is changing. The real test of the reliability of official reporting, therefore, will come when NBS issues its Q3 headline GDP figure.

The gravest threat to American global leadership is neither Russia nor China but continued interest group-driven Congressional abandonment of the kind of balanced strategy that won the Cold War.

China’s economy has shifted to a slow gear, having a bigger impact on those resource-exporting countries which highly depend on China’s market, but having no remarkable impact on European and the US economic growth. In particular, China’s slow economy is not the “culprit” of the recent US stock market slump, which was caused by the American market’s own problems.

The IMF holds a cautiously optimistic view about the prospects of the Chinese economy, recognizing that the important reason for a slowdown in China’s economy is the change in its development strategy. The services industry is rising, R&D is expanding slowly, and the financial system is modernizing. These changes take time and patience: If China chooses to slow down a little bit, it will be easier for the country to succeed and achieve the long-term goals it has anticipated.

The Wall Street Journal writes, "China is committed to reform despite slower growth, has the tools to avoid a major economic setback and won't resort to a currency war to benefit its exporters, the nation's premier said in a speech to global business leaders on Thursday.

The lens of government intervention in China has led foreign observers to misinterpret some of the most important developments this year in the foreign exchange market and the stock market.

The economy is stabilizing despite a slower growth pace, Li said at Summer Davos held in northeast China's port city Dalian. "On the one hand it is turning for the better while stabilizing; on the other hand difficulties remain," Li said.