China’s economy, which was the second biggest in the world, has progressively weakened between the April-June period, their second quarter of slower expansion.
Their economy has been growing rapidly for years, but Chinese leaders now seem willing to accept a slower expansion rate. Many things caused their slower economy, including weak trade data.
"China is facing a period of creative destruction. The creativity part of that is real … and will ultimately be good in terms of redirecting resources in ways that are much more productive," said Patrick Chovanec, chief strategist for Silvercrest Asset Management."But the destruction part is real too. So you're going to have sectors that have driven growth over the last several years but now there's massive overinvestment and massive overcapacity. They may actually see significant contraction,” he said, according to LA Times.
In the year 2012, China’s expansion was at a rate of 7.8 percent, which was their worst overall expansion in 13 years. BBC News reports that for 2013, the government has set a target of 7.5 percent expansion, which will be their lowest rate in over two decades.
Countries such as Australia, Brazil, and countries in South East Asia that frequently sell to China may have their own revenues suffer because of the slower growth rates.
Chinese officials say their long-term goal is to rebalance the economy.