China’s New Normal

TIME

Those who remain hopeful about the future of the Chinese economy got some extra evidence to bolster their case on Oct. 21. The Chinese government announced that GDP in the third quarter rose by a slightly better-than-expected 7.3%.

But don’t get too excited. That 7.3% is the slowest quarterly pace in five years, since the depths of the recession that followed the 2008 Wall Street financial crisis. And it’s likely that stronger exports, not investment or consumption in the domestic economy, are responsible for much of the unanticipated buoyancy in China’s economy.

That shouldn’t be surprising. This is China’s new normal. The double-digit pace the global business community has come to expect is very likely a thing of the past. More and more economists are predicting that China’s growth rates will continue to slow over time. The International Monetary Fund sees growth dropping from 7.4% this year to 6.8% in…

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