China, the largest economy of the world (by a few parameters), developed with the highest growth rate of more than 10% for continuous three decades, is now facing slow down. They have the targeted the growth rate of 7.5% this year which itself seems difficult to achieve.
Why? What has leaded to this fall down?
For understanding this, we need to understand the reason of the brilliant success story of this country. The parameters those have been responsible for the rise were: Investments, Infrastructure, and Labour.
Around 50% of the GDP of China was based on the investments. Now this investment factor is going low due to the challenges from the other emerging economies of the world. There are capacitive market places available to invest in, across the globe. China is losing this money it and facing a hard competition.
Properties, Infrastructure is something which actually became the reason of global slowdown in year 2008. The year of Recession for world. The same reason is leading to the slowdown of China. The infrastructure of country is developed, too many high risen new building have been built, so much money has been put in developing the infrastructure but actually the buyer is not available in market hence a significant amount is blocked and properties are on hold. Thus being a significant factor of slowing down for the country.
Labour, the most important, major and significant factor for growth of China. The world’s most populous nation is facing the issue of labour. China is now running short of young labour due to their one child policy. As a result the labour in China is now more expensive and less available. There are few other small parameters contributing to slow down of China as predicted, saturation always comes after the peaks are achieved. Same is the case with China.
But in order to maintain their consistent fall down and to climb up the ladder again China has launched “Made In China 2025” with the vision of 10 years on the node of project launched by Indian Prime Minister, Narendra Modi “Make In India”
So what two emerging economies of the globe have in their fist to make world a better place, Let’s see!