How's slow growth in China impacting the global economy?

Chinese authorities are preparing a slew of measures to bolster economic activities, with the governing party convening later this week to review economic performance in the first half of the year.

China has recently experienced slower growth, with its impact expected to be fully seen in commodities and manufacturing activities. 

Analysts believe that such developments will have global repercussions as well, following 45 years of rapid growth and globalization.

Chinese Government

The Chinese government is doubling efforts to bolster economic activities in the country, with the leaders recently vowing to revise and improve policies supporting the besieged real estate market.

In addition, the ruling party has vowed to support local consumption and fix local debt problems and boost employment.

Growth

After the world's second largest economy recently exited strict Covid 19 measures, China's GDP grew by 6.3% in the second quarter of the year, missing estimates of 7.3%.

The ruling communist party is expecting a 5% growth rate this year, much lower than the 9% average rate since 1978.

Triple Shock

Major Chinese economists point to three major shocks to the economy, Covid 19 and subsequent long shutdowns, floundering real estate market, and recent organisational changes championed by the current president. 

Chinese is till within a year of reopening the economy after the strict Covid 19 policies, so current weakness could still be attributed to recent shutdown policies. 

However, economists warn the Chinese economy might be heading for a long-term, structural slowdown, with GDP growth potentially averaging 4%.

Impact on the Global Economy

No doubt the entire world will take headwinds from China's economic woes, with commodities and manufacturing hurting worldwide already.

China is attempting to diversify its economies away from the real estate market and towards more advanced manufacturing, such as for solar panels, robots, semi conductors.

Such a step is witnessed already with China's heavy investments in electric cars, which allows the country to surpass Japan as the world's top automotive exporter. 

As China's economy slows down, the impact will be felt in the global economy, not  just negatively, but also positively, in the rise in the quality of Chinese products as the country repurposes its efforts to more advanced machinery.