How serious are China’s economic problems, and how big an impact will they have on the United States and world economies? Beijing and Washington, separately and jointly, will determine the answers.

First, both countries are essential to global growth, and both must carry out structural reforms to move their economies onto a growth-conducive footing for the long term.

In recent years, China has made two principal contributions to global growth: It sustained its own growth in the wake of the 2008 financial crisis and served as a demand driver for the commodity and industrial exports of other countries — consuming about half the world’s copper, nickel, tin and iron.

Both of these contributions are now in jeopardy. China’s growth, which was premised on an unsustainable model, was bound to slow as its economy matured. But if there is a silver lining to the slowdown, it is that it reinforces the urgency of reforms that will establish the foundation for slower, but higher-quality, growth.

bbabo.Net