This article primarily deals with the advent of ramifications that are associated with the recent slowdown in the Chinese economy.
Primarily, it seems as though investors are starting to show doubt in Chinese industry. This issue presents the nation with a unique challenge, as the nation must attempt to of shifting its historically export-driven economy towards one where the enormous consumer base within the country is used to spur economic development.
This shift will be complicated by a problem. Namely, Investment capital and the production industry has been shifting towards lower-cost countries such as Vietnam and Cambodia as wages rise across China. Indeed, “Foreign direct investment in the 10-member Association of Southeast Asian Nations exceeded such investment into China for the first time.”
One thing seems to be clear, China’s economy is at a turning point. The nation must adapt to a changing economic landscape – private consumption must grow, and the nation must find a way to continue or grow current foreign investment. The “New Normal” is around the corner and China needs to react to a changing world.
Source: New York Times “To Invest or Not as China Shifts” Jan 21, 2015.