Is China’s Growth coming to a halt?

14 Mar

Hong Kong- an area which is commonly seen as China’s growth engine has continued to show signs of weakness at the beginning of the year, with retail, manufacturing and investment all having slowed down in the beginning of the year. This has led to people questioning whether China is going to reach its growth targets (Wassener, 2014).  Premier Li Keqiang said that job growth and quality of life issues are taking precedence over economic growth, with the government trying to focus on a whole host of economic issues (Wassener, 2014).   A key issue which is trying to be fixed and diverting the government’s attention is pollution, with the country now aiming for a slower, greener growth (Sky News, 2014).  The air and water pollution found within the country have become politically sensitive issues, with investment being the main driver of economic growth within the country, the aim is to try and promote this through making the economy more environmentally friendly, including introducing an environmental tax plan (Sky News, 2014).

 

To some extent, this slow down in China’s growth is the result of deliberate engineering, with it being recognised that the economy must shift away from exports and heavy manufacturing and towards consumption-led growth. However, many analysts say that they believe the government may once again need to increase its efforts to prop up the economy if the growth slows too much, for example removing some of the constraints found on bank lending (Wassener, 2014).

 

References

Sky New, 2014, China Goes For Green Amid Slower Growth, Sky News online, Available at: http://news.sky.com/story/1221130/china-goes-for-green-amid-slower-growth [Accessed 14/03/2014]

Wassener, B., 2014, Its Growth Targets Elusive, China Focuses on Jobs and Quality of Life, The New York Times online, Available at: http://www.nytimes.com/2014/03/14/business/international/data-weak-as-china-gets-ready-to-transform.html?hpw&rref=business [ Accessed 14/03/2014]

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