Likonomics: the way ahead

From China's turbulent capital market last week, the most significant thing to watch is the rise of Likonomics (which China Daily first reported as Li-economics), a word coined by Barclays Capital during the turbulent past week, to describe China's economic scenario likely to be pursued by the cabinet led by Premier Li Keqiang.

No stimulus, de-leveraging and structural reform are identified as the three key components of Likonomics, meaning, in a nutshell, trading the economy's short-term pain for long-term gain.

If it proves workable, it may be seen as a mini-crisis on a controlled scale, engineered by the government's visible hand, to divert from the likelihood of a more serious crisis that would otherwise be inevitable if things are left entirely to be decided by the invisible hand of market forces.