China’s growth has been driven by several factors: high domestic investment and savings ratios, sizable foreign direct investment, the impact of catch up technologies, the massive shift of labour from subsistence agriculture to higher productivity roles in urban industrial 4  BIS central bankers’ speeches  production, and on-going market based reforms including, importantly, those associated with its membership of the World Trade Organisation since 2001.
Businesses are also facing challenges, including rapidly escalating costs of raw materials and weaker domestic demand, although the strength of foreign demand for U.S. goods and services has offset the slowing of domestic sales to some extent. All that said, we seem to have avoided some of the worst possible outcomes so far.