30 SECOND GUIDE TO ... CHINA

What about it?

THE economy. The Chinese economy is the second largest in the world behind that of the US. On some measures, it is now bigger than the American economy, such as so-called purchasing power parity (PPP), which makes adjustments for the fact that goods are cheaper in countries such as China relative to the US.

China’s booming, right?

It is certainly growing at a faster rate than developed economies in the West such as the US, the UK and Germany. Until 2010, China grew at an average rate of more than 10pc for more than 30 years. But last year it grew by 7.4pc – the slowest rate since 1990.

So it’s slowing?

Yes. The government in Beijing yesterday said it expects the Chinese economy to grow by ‘around 7pc’ this year – the weakest expansion for a quarter of a century. China is getting used to a ‘new normal’ as it moves towards slower and more sustainable growth. The property market is cooling, as are China’s factories, and business and government investment is easing.

What about jobs?

China has stuck to its urban unemployment target of 4.5pc or below and is still aiming to create 10m jobs a year. Although China missed its growth forecast for last year, it exceeded its employment forecast with 13m new jobs created despite the slowing economy.