Questioning sustainability of China economic growth

Policy | Zhu Ning

With the announcement of the tapering off of quantitative easing by the US Federal Reserve in 2013, emerging markets started feeling the chill. The currency and stock market have suffered losses of 30 percent in some countries, in conjunction with drastic capital flows out of emerging markets and back into safer assets such as US Treasury bonds.

China was no exception in this process. Even with its regulations on domestic interest rates, the yuan currency rate and capital flow, China has shown some signs of slowing down. The rate of growth has come down to some of its slowest in the past decade, the Purchasing Managers' Index has been hovering around the critical point between expansion and contraction and even the once sizzling real estate market seems to have started sputtering in some second- and third-tier cities.