China Grows at Slowest Rate in Five Years

by Marilou Long on October 21, 2014

in Foreign Markets,Geopolitical

China has been trying to slow down their growth rate to a sustainable level in order to prevent a boom and bust cycle, and it is a very delicate balancing act.  Their rate of growth for the third quarter came in at 7.3%, the slowest rate in five years.  From the linked WSJ article:

Navigating the slowdown is the biggest challenge China’s leaders face. They must assess how fast and how deeply economic growth will decline and what policies to adopt to make sure the slide doesn’t get out of hand. Doing too little could produce bankruptcies and unemployment. Doing too much and boosting stimulus could pump up real-estate and credit bubbles.

An annual Communist Party conclave is taking place this week in Beijing to discuss legal reforms and the continuing crackdown on corruption. Last year’s session produced an economic blueprint to give the economy a firmer long-term foundation by letting market forces play a much larger role. But China has been very slow in putting the plan into action, economists say, because of fears it might further undermine short-term growth.

Leave a Comment

Previous post:

Next post: