A slight turn in the economic markets of South-East Asia has begged the question of China of whether this is the start of an era of economic slow down, or in fact the beginning of a new era of reform policies based in moulding a domestic consumer based economy.
‘(On Monday, 10/03/14) Both Hong Kong’s Hang Sang Index and the Shanghai Composite fell by 2% while Japan’s benchmark Nikkei 225 closed down 1%.’ (BBC) This downturn, spread throughout the entire region, is feared to be indicative of perhaps a slow down for China, the fear that surely the prosperity of the past three decades couldn’t last. With such strong interlinking trade partnerships and diplomatic relations in the region being developed through the likes of ASEAN, perhaps any struggle within China is now guaranteed to leave the region hardest hit over the entire global economic system.
However, the links and dependency China has developed globally can be seen in the reaction to this economic fall, ‘China said exports plunged 18.1%.’ (BBC, 10/03/14) This is a display of the outward dependency China’s growth has been formed upon and how easily it can be taken away, hence why efforts within China have been strategically focussed on creating a domestic consumer based economy that can make use of the huge population and provide long term growth.
Perhaps we will see more slow downs and upsets as the CCP attempts to implement very difficult reforms to ensure the longevity of their economy. We can see the domestic led focus on the economy when the Chinese finance minister discussed the aim of 7.5% GDP growth in 2014, yet still highlighted that missing this target or bypassing was not the main aim, rather job creation was at the centre of the Party’s thoughts (BBC, 10/03/14). Clearly the strong growth, although wanting to be maintained is not the primary focus during this reform period, rather satisfying the citizens through job creation and hopefully leading to the eventuality of returned strong growth at the hand of domestic consumers is the end goal.
Read more of the Monday downturn here: