Confidence in the Chinese economy has been shaken by stock market falls and a lower growth figures for 2015.
China’s booming economy has been a significant driver of global growth for decades. But new figues show that growth is finally slowing.
Official figures released today show that China's economy grew by just 6.9 percent in 2015, compared with 7.3 percent a year earlier. That's the slowest growth in 27 years.
And, following recent stock market fluctuations and falling oil prices, there has been speculation in the West that the Chinese economic miracle might be coming to an end.
According to Peter Day, the BBC’s World Business Correspondent, some of these concerns are unfounded. Official Chinese growth rates have probably been unreliable for years, he believes — designed to maintain global confidence rather than reflect reality. As a result the current slowdown may not be such an abrupt change as it appears.
“I think that [double-digit growth] was a nice convenient figure, that you could fix,” he said. “Yes, there was very hectic growth but I doubt it was 10 percent year after year. You’d outstrip the potential of the world if you actually grew like that.”
Nevertheless, a new era in the Chinese economy is inevitable, even if the transition is painful, according to Day.
“This is now a normalizing economy — which is bound to happen in a tear-away economy — and normalizing is very difficult to do. We’ve seen it in Japan, which grew in the 1960s, '70s and '80s. And when it went bust more than 20 years ago [Japan], found it very difficult to recover from that. So that is the fear.”