Beijing looks to tame an economic slowdown

CHINA has entered 2015 amid a deepening economic slowdown. Steady declines in home prices, home sales and real estate-related investment, combined with the impact of still-weak external demand and rising input costs for Chinese exports, all but ensure that China’s economic growth in 2015 will fall to its lowest level since 1990.

Stable growth in services industries, buttressed by rising household consumption, will mitigate some of the negative social and political effects of slowing industrial activity. However, these components of China’s economy are not yet strong enough to offset the inexorable winding down of China’s decades long export and investment boom.