Thursday, December 15, 2011

China Forecasts Slower Growth For Next Two Years

China's economy is slowing down. Most countries would like to see their growth slow down to 7-8%, but losing 2-3% growth in GDP will cause some adjustments in China. Slow growth in Europe and the US has caused a drop in manufacturing production. Export based economies, like China's, suffer when their client economies slow down. Government investments provides 40% of China's GDP, consequently, there is not much room for further government stimulus.

The slowdown in China's economy will also affect the BRIC economies, like Brazil, which has been a source of commodities for China's booming manufacturing base. Brazil has had several months of slow growth after growing rapidly along with China. Growth should also slow in several Asian countries that supply intermediate products to China.

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