We have also known that it was unlikely to need continually expanding quantities of commodities, particularly industrial commodities such as coal, iron and copper. What we have not known is whether this slowdown would be abrupt or gentle. Market assessments have recently shifted, to some extent, away from the benign, gradual scenario.
Commodity prices have tumbled as a result; the Bloomberg commodity index fell to levels last seen during the Great Recession in 2008. There were two triggers for this shift. One was the inflation and subsequent collapse of the Shanghai stock exchange bubble. The second was a devaluation of the renminbi. Exactly what these events mean for China’s growth trajectory remains unclear.