China’s export boom is becoming its Achilles heel

China’s export boom is becoming its Achilles heel

China is rapidly approaching the point where its strengths become its weakness. Data released this week shows its economy is growing strongly. GDP growth of 4.5 per cent in September and 4.6 per cent for the first nine months of the year are keeping it on track to meet Beijing’s target of between 4.5 per cent and 5 per cent growth this year.

The figures were stronger than economists had predicted. While that might appear to demonstrate Chinese exceptionalism in a global economy spluttering under the weight of debt, wars and trade wars, it also highlights the ever-growing imbalances within Asia’s biggest economy. For the past five years – ever since President Xi Jinping implemented his “three red lines” policy that curbed property developer’s leverage and triggered a crash in the country’s property market that continues today — China’s domestic economy has stagnated.