Additionally, diverse factors specific to the domestic economies of the EMEs have also been responsible for their slowdown. Chinese economy slowed sharply, owing to a tightening in credit conditions (in response to threats of a real estate bubble), a return to a more sustainable pace of public investment, and weaker external demand in advanced economies due to their slowdown.
China’s surplus, for instance, fell to 2.8% of GDP in 2011 from more than 5% in 2010. China’s growth in Q2 of 2012 fell to a three-year low of 7.6 per cent, down from 8.1 per cent in Q1. China’s economy continues to weaken, with the industrial sector growing by just over 9 per cent in July, the lowest in three years.