Much of today’s press on China refers to the slowdown in the Chinese economy. Nine percent, it would seem, is something to be worried about. Yet it was earlier this year that the Chinese government announced a reduction in its growth target. This reduction was often linked to slow growth and crisis in the rest of the world. This may well have had something to do with the decision, but probably wasn’t the major concern. China’s overwhelming issues are domestic, and whereas there are issues of over dependence on exports, and a need to promote domestic consumption, the much larger challenge for China lies in the ever-increasing disparity between rich and poor. In our post Time to smell? we reported on Burberry’s claim that one of its top selling items in China was a £2495 iPad cover. Such wealth is not in itself the issue, but when you consider that it could well be be cheaper to employ someone to carry the iPad around for its two year life expectancy, then the vast income disparities in China become more sharply focused. Such inequality poses a threat to social harmony, and if one thing absolutely pre-occupies politics in China it is maintaining social harmony.

The target of 7.5% for 2012 reflects expectations that reduced exports due to the European crisis and a fragile US recovery could dampen growth in the world’s second-largest economy.

It is easy to point to the Euro crisis or a stagnant US economy, or some other event happening in the West and to pin changes in China’s economic policy to them, but we shouldn’t be too quick to think that every song is about us!

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