China's economy is experiencing a bit of a slowdown-and that's exactly what the country wants.
Chinese economic officials reported that its GDP-which measures how rapidly a market grows-growth rate was a low 7.5 percent during the second quarter of this year. In fact, out of the last 13 quarters, 11 mark a gradual decrease in finance and production.
What's the deal?
For starters, China's growth in the world market can mostly been attributed to its enormous export sector, along with urbanization-economists from other nations have warned that these areas of business are, in the long run, not sustainable, since China is essentially making goods to cater to other countries rather than the citizens of their own land.
That means China must slow its roll on banking, as the current status of its money-holding institutions mirror that of the American financial system before the economic crash, the Washington Post reported. China has put too much investment into real estate, has over-leveraged, and borrowed and lent too much for comfort.
Although the drop-off is certainly tied to economic issues worldwide-including weakness for the Euro and the possibility of more strict financial policies in America-most of the slack looks like it's intentionally being put on by Chinese leaders, according to the Los Angeles Times.
The Chinese are now pumping the breaks on their economy after almost 20 years of massive annual growth-each year, the numbers climbed into the double-digits. Because the country experienced such hot expansion in such a small number of years, China is aware that it could face a collapse much like the United States' in 2008. With this in mind, economic leaders are working to carefully prick the banking bubble in order to slow down the market and avoid a stall.
It could be that China is forcing changes by slowing down the economy, and ultimately, the nation might put a halt on exporting inexpensive products across the seas and focus on its own country instead.
According to the Post's foreign affairs blogger Max Fisher, China must find the middle ground between too-quick a deceleration and a complete slump. Not only is the Chinese economy important in the scope of the rest of the world, a balanced financial status in Beijing could also help the Chinese middle class, and stoke some serious change within the country.
