China's previous impressive growth rates may have slowed in recent years, but the central government is still targeting annual growth of 6.5%. As such, it is not a market that should be ignored by UK businesses, says Janet Henry.
A large part of the Chinese slowdown can be attributed to a significant shift in emphasis from investment and export-led growth to an economy that will increasingly be driven by consumer spending.
"China is in the middle of a transition period and inevitably growth rates are going to be slower as the country moves towards consumer-led growth," says Henry.
"It is important to remember, though, that initially the Chinese government was deliberately slowing growth as the property market was in danger of overheating."
While at the turn of the year the markets became concerned that the Chinese economy was perhaps slowing too much, the government has demonstrated that it does have the tools in its locker to stabilise growth again. Over the last few months there has been a revival in credit growth, along with an improvement in the property market and infrastructure spending has started to pick up again.
China is in the middle of a transition period and inevitably growth rates are going to be slower as the country moves towards consumer-led growth
China's transition, though, will have reverberations on the world economy, explains Henry.
"When Chinese investment is growing strongly, it's supporting a lot of other countries in the world particularly commodity producing countries, but also capital goods producers.
"As China's growth is going to be more focused on the consumer, it means some of the countries that will benefit from the next stage of the China story won't necessarily be the same ones that were the big beneficiaries of the last decade of growth."
From a UK standpoint, the relative slowdown in China hasn't had a huge impact as the majority of UK exports still head to Europe and the US. However, the UK, along with other more value-added economies could stand to benefit from China's ongoing transition.
For Henry, the most important message is that the China story still has a long way to run.
"China still has huge productivity catch-up potential, the urbanisation process still has decades to run and standards of living will continue to rise," she says.
"China's growth may have slowed but it is still contributing over a quarter of global growth and is going to continue to be a phenomenally important global market."
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