China’s Economy Slow Down is Bad for America

China’s economy is seriously slowing down. And that is not good for America. China’s economy is slowing down more than ever before. Last year, China missed its official GDP growth target. And many experts say China’s economic growth was probably even slower than that.


In March 2016, at the National People’s Congress, the government announced it’s replacing its GDP growth target with a target range. Chinese leaders are acknowledging that things are getting worse.

But don’t worry. They have a plan. So first, how is the Chinese economy doing right now? Well, it’s definitely slowing down. But even the Central Government doesn’t know exactly by how much, because city and provincial officials have been making up local GDP growth figures for years. Plus, China is struggling with growing debt, lower commodities prices, real estate bubbles, a shaky stock market, etc.

But at the National People’s Congress, a big focus was on manufacturing. The Finance Minister said Chinese wages are too high, and workers have too many rights. The cost of labor in China has been rising so much that a lot of companies are looking to get their stuff made elsewhere.

So now Chinese leaders want to boost the economy in the short-term by keeping wages down so China’s manufacturing can stay competitive. It’s like, there’s all that talk in the US about China taking American jobs and now even poorer countries are taking Chinese jobs.

So is China’s plan going to work? It might. But it’s like a game of Jenga. Every move you make now could lead to a more serious problem down the line. Chinese leaders already recognize that in the long-term, they really need to shift away from low-wage manufacturing and develop service and technology industries.


For long-term growth, China needs to increase domestic consumption. And that can only happen if Chinese citizens have more money to spend. Hence the need for higher wages. Chinese domestic consumption is what America has been hoping for ever since President Clinton helped China get into the World Trade Organization.

American companies are selling products in China now. Instead of America dominating the Chinese market, China has been dominating the US market, which CNN explains – “We were about equal in 1985, and we have not risen nearly as much in terms of the products we send to China. Because China has spent the last couple decades creating its own versions of US products so it doesn’t have to buy so much from America. Like how the Chinese government banned Microsoft Windows 8, and replaced it with a homegrown knockoff, NeoKylin. Or how the Chinese government banned its agencies from buying iPhones and instead encouraged them to buy homegrown phones like obvious knockoff Xiaomi. Or how the Chinese military copied the design of the Hummer, and created their own Eastern Wind vehicle.”

And the key is that with China’s economic slowdown, the market for US products there may not get as big as US companies hope. So the promise of the US economy benefiting from helping China grow is looking more and more like this.

So what do you think about China’s economic slowdown? Leave your comments below.

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