News:According to China’s National Bureau of Statistics,the Chinese economy grew by just 6% in the third quarter of the current calendar year.
China’s growth slowdown
- China’s growth rate has been slowing down since the global financial crisis of 2008-09.
- However,China had recovered quickly and got back to double-digit growth in 2010-11 but since then it has been slowing down steadily.
Reasons for growth slowdown:
- China’s fastest growth phase was during a phase when it was led by exports growth.But in the wake of the global financial crisis, domestic consumption was seen to be a more robust way of sustaining growth.
- On the domestic consumption side,China’s one-child policy had placed structural constraints and this was one of the reasons why that policy was withdrawn a few years ago.
- Domestic consumption has also been adversely affected by rising inflation cutting into people’s incomes as well as the outbreak of swine fever.
- Further,the demand has been affected by the growth deceleration that has happened as a result of the trade war with the US and the consequent uncertainties.
Impact of China’s slowdown:
- The slowdown in China which is the world’s second-largest economy after the United States is not just a cause of worry for the Chinese but also for the global economic momentum.
- The global economy is driven heavily by economic activity in some of the biggest economies like the US, China and the Eurozone countries.