China’s ‘new normal’ showing first signs of strain

The Shanghai Stock Exchange’s composite index nose-dived 27 per cent in June before it began to rally.
(photo: dpa)
The Shanghai Stock Exchange’s composite index nose-dived 27 per cent in June before it began to rally. (photo: dpa)

For the past 30 years in China economic growth has been king, an unofficial religion in a country where the governing Communist Party disdains any faith other than itself. After decades of double-digit growth, expansion has now slowed to seven per cent per year, according to the government, or considerably less, if one listens to its critics. Whatever the number, the key issue is how well China’s leadership is managing the transition to the post-boom era.

THE NATIONAL Bureau of Statistics (NBS) reported gross domestic product grew last year by 7.4 per cent, a figure the Chinese government says will fall to about seven per cent in 2015. Exactly on cue, GDP growth fell to precisely that...

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