James Bullard, the president of the St Louis Federal Reserve, on Tuesday addressed concerns over the perceived bubble forming in the Chinese economy, and maintained that the economic recovery led by Asia was unlikely to be derailed.

Bullard noted that many Asian equity price indexes, including some in China, had declined substantially over the past two months, and that this had led many to assume bleaker days ahead. "One might worry that some type of "bubble" has formed in the Chinese economy in