Edentree's Hepworth: Why some of China's growth falls can be viewed as a positive

Authorities clamping down

Despite transformation over the past 35 years, China is still a relatively poor country, with 2014 GDP per capita of $13,200 on a par with South Africa and Serbia, writes EdenTree's Robin Hepworth.

Chinese growth has been relatively strong and stable over this period, dropping below 8% only during the early 1990s, when government reforms of the large state owned companies were taking place. However, post the global financial crisis, authorities implemented significant debt financed investment spending as a response to the reduction in global trade. This resulted in the share of investment rising to 46% of GDP. Some of the falls in Chinese growth recently could be viewed as a positive. The authorities are clamping down on corruption and pollution, which must be regarded as progre...