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6 Reasons Not to Fear a China Slowdown

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Does a falling currency signal that China’s economy is in trouble? Possibly. China’s long era of torrid GDP growth is clearly coming to an end. What isn’t known: Whether the slowdown will be gradual enough not to disrupt the global economy, which has long relied on China for growth, or abrupt and a threat to world markets.

We at Kiplinger think that the Chinese economy will sputter more but won’t flame out. Beijing’s official growth rate of 7% is almost certainly inflated to keep up appearances. Construction and manufacturing—key components of Chinese growth—are slowing. But the government still has trillions of dollars available to gin up infrastructure work and other projects to avoid a steep drop in activity, and it’s willing to spend the money.

Here are six reasons not to fear a China economic slowdown:

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