That rate is now down to below 8 percent and by some accounts still falling; growth of U.S. exports to the country have all but stalled; and trouble in the country’s financial sector rocked world markets a few weeks ago.
China reported trade data Wednesday that pointed to weaker growth in the second quarter. Exports fell 3.1 percent in June from a year earlier, the first decline since January 2012, while imports dropped 0.7 percent.
The seemingly unthinkable question is now being posed: Is China faltering?
“It is a different dynamic from what we have seen. . . . This is more-moderate growth from an economy that has started maturing from the go-go days of before,” said John Frisbie, president of the U.S.-China Business Council. With the new government in Beijing still taking power and heading into a potentially pivotal party congress this fall, “the debate is real. . . . The slowdown matters.”
The annual U.S.-China Strategic and Economic Dialogue begins Wednesday with Secretary of State John F. Kerry and Treasury Secretary Jack Lew leading the U.S. delegation, and China state counselor Yang Jiechi and vice premier Wang Yang heading the Chinese team. Top-level security, central bank and other officials will also be involved.
In an op-ed in The Washington Post ahead of the discussions, Yang pledged a “deepening” of China’s reforms and said that the mood set by President Obama and President Xi Jinping in their “no-necktie” meetings last month would carry through to this week’s talks.
The backdrop is predictably complicated, evidence of how central the U.S.-China relationship has become to world political, security and economic affairs. Along with perennial issues such as North Korea, human rights and China’s policy of closely controlling the value of its currency, recent U.S. allegations about
cyber-espionage and corporate hacking have become a central part of the discussion. American officials are pressuring China for a response while simultaneously trying to deflect the revelations of former NSA contractor Edward Snowden, who during his stopover in Hong Kong alleged that the United States does plenty of snooping on its own.
The issue has become such a core concern — potentially “destabilizing,” in the words of U.S. Chamber of Commerce international economics head Myron Brilliant — that the two sides have set up a separate working group to help avoid sidetracking the rest of the discussion. New panels also have been established on climate change and energy security, issues of increasing urgency in China as it battles both a rapid run-up in energy demand and what have become dangerous pollution levels in major cities.