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China: The economy’s growth is finally slowing down

on July 15 | in All, Asia, Economy, Markets | by | with No Comments

China are India are still by far the countries with the largest populations in the World. While China tops everyone with 1.350.000 people living in their territory, India comes right after with 1.210.000 inhabitants. Together, these 2 countries represent roughly 36% of the World population, meaning that on average, one out of every 3 persons that live on Earth are either Chinese or Indian. However, being extremely populated doesn’t necessarily mean that the country itself will dominate the World’s economy: China currently ranks 2nd and India 9th, when accounting and sorting countries for nominal GDP.

Nevertheless, big populations surely have the potential to represent a key factor in any economy‘s growth. For the past couple of decades, China has been growing on a steady rate and gradually menacing to become the main player in the World’s modern economy. The country’s extreme protectionism has allowed the local economy to survive with few bumps and bruises against most of the recent capitalism’s crisis, but everyone is aware that there is only that much one can grow. Sooner or later, a different cycle is likely to arrive.

According to the “National Bureau of Statistics of China“, the country’s growth for the 2nq quarter of the year has decreased to 7.5%, a still significant smaller figure than the one registered in 2012 (7.8%), which had already been the lowest since 1999. The two-digits growth seems to no longer be a reality for the Chinese economy, but many believe that the Government’s current strategy is actually more wise, as it appears to target a long-term stability.

For many years and alongside with investment, China has relied almost exclusively in their industry in order to feed a great amount of exportation. What has changed is that the Chinese government has recently been showing some efforts to switch this reality, with the main purpose of re-balancing an economy still highly dependent on the country’s industry. For this to happen, most of the focus from the Chinese authorities has been oriented into improving the domestic consumption, which basically means that it will also depend on enriching the population and their disposable income. Whether this strategy will turn out to be a smart move or not, only time will tell…

China economy in 2013 and 2014

Financial charts from the Chinese economy

China has the biggest population in the World

A funny US and China comic drawing, about leading the World economy

Sources: stats.gov.cn / publico.pt

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