Understanding China Slowdown - Research Paper Example

 One of the most telling signs of the Chinese economic slowdown is the inventory of steel is up by 39% indicating that there is a decline in construction activities.   Vehicle and real estate consumption was is also in a decline falling 1.3% in January with an 80% vacancy in the tourist destination of Haikou and Sanya indicating that there is not much extra cash floating around.

The reason attributed behind the Chinese economic slowdown is the lessening of its stimulus spending.  The latest stimulus program that had been implemented was three years ago and Chinese authorities are not seemed keen on implementing another stimulus spending again.  It now seems aware that the previous stimulus spending activities resulted in overbuilding that they are now cautious to overspend so as not to add to the already massive overcapacity of the Chinese economy that would run the risk of overheating.