China's economy grew by 7.4% in 2014, down from 7.7% in 2013. A fall in "fixed asset investment" (mainly in the form of spending on property and factories) was the main reason for the slowdown.
Even so, last year, China's output was more than $10trn. It's only the second country to achieve this milestone after America. The economy is now five times bigger than it was a decade ago and 25 times the size it was in 1990.
One reason for this, as the Lex column in the Financial Times pointed out, is that "there is more of the economy to grow", so raising the total as rapidly as in the past gets harder. But the key issue is that China "has long been a junkie of fixed investment".
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The government is trying to wean the economy off the credit-fuelled property and infrastructure binge of the past six years and shift focus towards consumption and services. The so-called 'new normal', then, is about the quality of growth, not merely the quantity.
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Statistics suggest that the transformation of China "from the world's factory to the world's shopping mall" is making progress, said Jonathan Kaiman in The Guardian.
Consumer spending continued to expand consumption underpinned 51.2% of growth last year, up 3% from a year earlier, said Economist.com's Free Exchange blog. (In the US and UK, it comprises over 65%.)
Also, healthy wage growth has boosted workers' share of output, key in terms of "tilting the country towards greater consumption".
Yet deflating the credit bubble won't be easy. Credit growth is rising faster than overall GDP. The government fears that a sharp slowdown in growth could stoke social unrest as employment suffers. But micromanaging a debt-saturated economy is tricky, as Mark Magnier put it in The Wall Street Journal.
Channelling loans to specific sectors is getting more difficult "as banks balk at adding more nonperforming loans and borrowers hesitate". And if the state decides to allow another economy-wide lending spree, the debt pile would only grow, potentially causing a crash, or a worse slowdown, later. There is a long way to go, and the Chinese government is walking a tightrope.
