Some financial analysts have recently raised concerns over China’s economic slowdown, the
Chinese government’s poor handling of the stock market downturn, and the relatively slow pace of economic reforms.
On the one hand, China appears to be rebalancing its economy away from rapid growth that is driven by high fixed investment, exporting, and heavy industry, to a more domestically oriented consumption-based economy with greater emphasis on services and innovation.
For some, China’s slower economic growth rates are a positive development. However, the Chinese government continues to emphasize the role of the state in the economy, and it is unclear whether it is willing to implement the type of comprehensive economic reforms that are needed to ensure that healthy economic growth continues in the years ahead.
Some economists warn that the absence of new reforms could cause the Chinese economy to stagnate in the years ahead, which in turn could negatively affect the global economy.
The positive side of this equation is if China is successful in increasing the size of it´s domestic consumer markets it could be an opening for other economies to export into as the consumer base becomes more capable and interested in acquiring goods from abroad. This will of course depend on government regulations regarding imports and the tariffs that could become a barrier to entry of goods from abroad.