After more than a decade of rapid growth; China’s economy has been experiencing a painful slowdown for the last two years.
Matching by the time the central government seeks to move towards an economy led by consumption and services, rather than one driven by exports and investment; however, managing that transition has been challenging.
China’s economic growth rate slowed to a 25-years low of 6.9 percent in 2015 compared to 7.3 per cent growth in 2014, as the world’s second-largest economy continues to shift away from its manufacturing roots.
In the final quarter of last year, growth slowed to a six-year low as trade and consumer spending weakened, deepening a downturn that has fueled anxiety abroad over its impact on an uncertain global outlook.
Chinese leaders are trying to reduce reliance on trade and investment by nurturing slower and more self-sustaining growth, based on domestic consumption and services.
Nevetheless the unexpectedly sharp decline over the past two years prompted fears of a politically dangerous spike in job losses. Beijing responded by cutting interest rates and taking other steps to shore up growth.
“Official data do not point to a hard landing in the fourth quarter of 2015, but they provide little reason to stop worrying about China’s drag on the global economy, either,” said economist Bill Afdams of PNC Financial Services Group in a report.
“The economy still faces relatively big downward pressure this year despite signs of stabilization in property and auto sales,” said Nie Wen, an economist at Hwabao Trust in Shanghai. “Macro-economic policies will stay accommodative,” he added.
When comparing numbers, many analysts consider what is happening in China “a slowdown” in its economic growth rather than a “meltdown”.