Ambrose Evans-Pritchard says 'hysteria over China has become ridiculous'

Things have settled down after a blustery start to the day as oil markets whipsawed everything. It's not often that you need to turn to AEP for a dose of calm but his latest column focuses on China and capital flight.

He believes the worries are over done and can largely be explained by moves to pay off foreign debts ahead of expected Fed hikes.

"There is a world of difference between precautionary moves to cut dollar debt, and a mass exodus by Chinese and foreigner investors because they think Beijing has lost control. Exactly which of these two themes dominates will shape world events this year.

Any hint of relative optimism on China in the currently wildly-polarized mood can easily be misunderstood. My view has long been - and continues to be - that China has left it too late to wean the economy off debt-driven growth and over-investment in industry, and will therefore drift into the middle-income trap," he writes.

To be clear, AEP isn't switching to anything other than a perma-bear. He thinks the latest moves by China have bought another 12-18 months before the real reckoning comes.