The Chinese economic slowdown should concern the global community

The Chinese economy has slumped to its slowest rate in five quarters. It is in danger of faltering if solutions are not found at the Third Plenum meeting, particularly to the long-term property crisis. If a solution is not found, it should raise concerns for the international community.

Past outcomes of the Plenum have changed the course of Chinese history. In 1978, then-leader Deng Xiaoping opened China's markets to the world, and in 2013, President Xi Jinping hinted at loosening the controversial one-child policy. Expectations of this year's Plenum are high — Xi is presiding over a closed-door gathering of 370-plus high-ranking Chinese Communist Party members.

Gross domestic product expanded 4.7% in the second quarter from the same period a year earlier, weaker than all except one of 28 estimates in a Bloomberg survey of economists.

Retail sales rose at the slowest monthly pace since December 2022. "China’s economy hit the brakes in the June quarter," Moody's economist Heron Lim. The world's second-largest economy is facing a prolonged property crisis, steep local government debt, weak consumption, and high unemployment.

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This has real implications for the U.S. market. Some slowdown is always anticipated because such massive growth cannot be sustained, but this level is cause for concern. The No. 1 impact will be that fewer goods can be imported. This could have major implications for the United States because it exports close to $150 billion worth of goods to China.

The U.S. cannot do anything about the downturn China is facing. Most of the trouble stems from the real estate bubble we can't fix. The global community needs to pay attention to China because failure to recognize the implications ensures a faltering global economy.