Andrew Batson reports for the Wall Street Journal on the question: How long will China’s flywheel economy run?
Some of the froth is finally starting to come off China’s booming economy.
Investment spending on factories and infrastructure, long the main driver of the nation’s growth, has begun to ease. Loans are harder to come by, with real-estate developers in particular feeling the effect of government curbs on credit imposed late last year. Some companies squeezed by higher raw-materials costs are reporting smaller profits, leaving them less money to finance expansion…
The moderate slowdown that authorities have engineered in the domestic economy is coming at a time when global economic prospects are increasingly uncertain. China’s export growth has been easing for several months as the U.S. economy has weakened, and that sector is unlikely to provide as big a boost to China’s overall growth this year.
See also China Daily’s opinion: Avoid Sharp Slowdown, which says,”Two weeks before China’s first quarter economic figures become available, two international organizations have slashed their growth forecast for the Chinese economy. Such quick adjustments highlight growing concerns over the negative impact a US-led global slowdown may exert on the Chinese economy.”
