China’s economy will probably grow by less than 8 per cent this year due to weak international demand and a sluggish domestic real estate market. Now the talk among China-watchers is that it is approaching a breaking point on its path of growth: the episode of high growth is over and the country is heading towards a path in the range of 6-7 per cent.

This mood is strong inside China. When Justin Yifu Lin, who just returned to China from his position as chief economist of the World Bank, announced China would keep growing by 8 per cent before 2030, the Chinese media dubbed his claim as “shooting a satellite” – a phrase referring to the widespread phenomenon of output exaggeration in the Great Leap-forward of 1958.

China’s slowdown is bad news for countries that are linked to its production chain. This includes East and Southeast Asian countries, regions that export to China, as well as China’s raw material and energy providers such as Australia, Brazil and the traditional oil producers. However, China’s slowdown can be good news for the developed world, especially the US. My colleague Yiping Huang and David Li, professor at Tsinghua University, both believe that the share of household consumption in GDP has increased in the past several years. China’s current account surplus also declined substantially to a mere 2.8 per cent of gross domestic product last year.