The economy of China has reached its slowest pace in 24 years last year as it has only grown 7.4%. While most countries around the world would be rejoicing at their economic growth rate, this seemed like China’s turning point. This is probably the reason why some companies, like Uncle Buck pay day loans LLP, in China are slowly laying off employees to keep afloat.
When the Western sanctions took effect after Tiananmen cracked down, it was the lowest annual growth for China recorded since 1990. They also came really close to missing their “approximately 7.5 percent” growth target; which would be the first time it would’ve happened for centuries. According to the predictions of IMF, India might surpass China as being the fastest growing economy in the world by next year.
China’s slow economic growth rate may seem more of a bad news for the world, but it might just be a blessing in disguise. According to Xi Jinping, this slower growth rate of China’s economy is the “new normal”. He’s most probably right. Slow economic growth is not normal, but it could be seen as an accomplishment. As what Barry Naughton, an economist has said “China’s growth is slowing because it graduated early”.
Currently, China is considered as a middle-income country due to their high standard of living and high salaries. Note that high wages mean high cost of living, it also signifies loss of low-cost manufacturing to other countries such as Vietnam and Mexico. China has also exhausted their growth potential from foreign technologies. Most of the high-tech industries in China are almost at par with their Western competition.