Last year, China experienced a decline in GDP growth, along with a steep drop in consumer sentiment exacerbated by an anti-corruption campaign that dampened the intention to spend in lower-tier cities in particular. This year, although business activity was slow in the first quarter, the economy has shown signs of stabilizing, with improved consumption growth. After dropping to a five-year low in January and February, total retail-sales growth increased in May to 12.5 percent, its fastest pace since December of 2013.
It is not enough for global businesses to know that in coming years China's economy will move away from an over-reliance on investment and toward more consumption. They also must know that the potential costs and benefits of rebalancing the world's second-largest economy are high and will affect industries not only domestically but also around the world.
In another sign that China's booming economy may be slowing, the country's manufacturing sector contracted in June after facing a credit crunch and seeing a decline in orders from Europe and the U.S., a survey said.