Based on the presupposition that all is well on the macroeconomic front, commentators on the Chinese stock market invariably lead readers to a dead end by raising the question - Why has the stock market performed so miserably?

There is, indeed, no answer to this question unless that basic premise is open to dispute. The fundamental change taking place in the macroeconomic matrix will determine the longer-term stock market trend, irrespective of the short-term fluctuations with which many analysts and punters are so obviously obsessed.

By any standard the economy is not doing badly, maintaining growth of more than 7.5 percent even in these difficult times. But such a growth rate, when put into context, represents a marked slowdown from the average double-digit annual expansion of past decades.