Slowing Growth Can Be Great News

Over the past 33 years, China has thrived on a singular economic model: high-volume manufacturing of low-margin products for the rest of world. Today, that growth model has stalled – and not just for cyclical or near-team temporary reasons, but because it has come to the end of the line. That is evidenced by the excess capacity that has built up in many sectors, such as steel, cement, solar panels and construction materials, as well as the rising cost structure, declining global competitiveness and shrinking corporate profitability of many Chinese companies.