30 SECOND GUIDE: Slowdown in China

By DAILY MAIL CITY & FINANCE

Updated: 03:59 EST, 11 July 2013

The Daily Mail City team explains the causes and effects of the slowdown of the world's second largest economy.

What is slowing down?

The Chinese economy. China is the world’s second largest economy behind the United States and is the fastest growing major economy in the world. But there are signs that it is slowing in a major threat to global growth.

How slow?

Growth is still well ahead of the rates seen in developed countries across the West. China’s economy grew at an annual rate of 7.7 per cent in the first quarter of the year following growth of 7.9 per cent in the previous three months.

Feasr: China's slowdown is a major threat to global growth

So it is booming

Those are impressive growth rates compared with what Europeans and Americans are used to. But growth rates have averaged over 10 per cent for much of the last 30 years. And there are fears growth may slow further.

Why?

Many reasons. But one of them concerns the health of China’s key export markets in the US and Europe. The American economy is steadily recovering but the eurozone remains in recession.

China is trying to rebalance its economy to rely less on exports and more on domestic demand but this is proving tricky.

How tricky?

Figures yesterday showed exports fell 3.1 per cent in June from a year earlier amid weak demand for Chinese goods overseas. Imports fell 0.7 per cent – showing subdued domestic demand as well.