The Slowing Chinese Economy - Rebalancing Has Implications

The rate at which China's economy has grown in recent years (as measured by the growth in GDP) is slowing. China's economy is still growing - but slower - and this has significant implications for both domestic and overseas businesses in China as well as the rest of the world trading with China.

Look at the recent rates of annual economic growth achieved by China: [source PwC]:

2003: 10.0%

2004: 10.1%

2005: 11.3%

2006: 12.7%

2007: 14,2%

2008: 9.6%

2009: 9.2%

2010: 10.4%

2011: 9.3%

2012: 7.8%

2013: 7.7%

The key term to remember is "rebalancing". China's government wishes to change the reliance of Chinese economic growth from investment exports to a greater emphasis on consumption. What are the implications of this? As the second video below explains, a successfully re-balanced China will inevitably be a "slower China" compared with the fast rates of growth enjoyed during China's unbalanced growth phase.

As China's economy matures, other key features are emerging which have potentially profound impacts. Not the least is the growth of wage costs in China and the lower number of young workers available to China's factories. These features are explored very well in the first of the two videos below.