Some countries cling to the past in their assessment of China’s economic influence on their own economies. Australia is watching the slowdown closely, given its reliance on China’s demand for coal, iron ore and other exports. There is a reluctance to acknowledge that the changing structure of the Chinese economy may also mean a change in the structure of Chinese demand for resources.
(Aug 5): China’s economic growth slowed to 6.2% in the second quarter, making it the weakest pace in 27 years. The weakness has been exacerbated by trade and tariff wars, but it also reflects a long-term underlying economic slowdown. Inevitably, growth will slow further as economic development continues, so the challenge is to constantly examine the drivers and quality of growth.
Already, smart investors have shifted their China exposure from export-dependent industries to those associated with domestic China consumer growth. The contribution of exports to GDP has declined markedly over the past decade.
