Filling in the Gaps

A Decreased Growth Forecast

It was reported in a recent article on BBC.com that China’s growth forecast, along with several other East Asia Pacific countries, has been trimmed slightly for this year. As has been proven in recent years, every economy has its ebbs and flows. According to Axel van Trotsenburg, Vice President at the World Bank who was quoted in the same article, “East Asia Pacific has served as the world’s main growth engine since the global financial crisis.” Clearly economies like China’s are not immune to the same ebbs and flows as the rest of the world’s economies.

Reforms on the “Horizon”

This slowdown has obviously triggered concerns about the world’s second-largest economy. Now that the chink in the armor has been revealed, it’s time to learn from and adapt to this oncoming storm. China has already announced reforms to its economy that, once implemented, could lead to another growth spurt. Unfortunately, it could take years, perhaps even a decade, for some of these reforms to truly settle in and once again strengthen the economy. 

Taking Advantage of the Situation

Most of the world will look at this situation and feel concerned. Others should look at it and see opportunity. Whenever there is a slowdown, decline, or a flaw in the system is revealed, this produces a vacuum. What any good businessperson should do is try and figure out how they can be the one to fill that vacuum. Clearly something is lacking. Either the gap needs to be filled, or replaced with something new and better. The first person to figure out the solution to either of these scenarios stands to benefit greatly. So, while some people see something to be worried about, others see it as a chance to reposition their portfolios and adapt to the changing economy by contributing to its continued success.