Two Sides. Yuan Coin.

China announced the good news that their economy is growing at a marginally reduced annual rate of 7.7% per annum. However they were faced by the bad news that their economy is growing at a marginally reduced annual rate of 7.7% per annum.

No I have not gone crazy. Like a coin there are two sides to this statistic. It is clear that there's no hard landing in China nor a quick end to their era of high-growth , whose implications are both good and bad would have a global impact. China's current main growth sources are unsustainable and the longer their growth rate remains at this level the greater the damage will be when this day of reckoning arrives. 

The big flaws in China's economy worsened in 2008, in the immediate aftermath of the banking crisis which was a Western phenomenon but hobbled growth and demand all over the world. In particular it undermined China's export-led economic model. When Europe and the US in effect went bust, we no longer wanted to buy all that lovely cheap stuff made in China, so China's economy effectively hit a brick wall, prompting the urgent call for an alternative.

Chinese government might have taken the opportunity to engage in the "demand rotation" policy that it and the world really needed by enforcing big reforms which would have encouraged its 1.3 billion people to consume and spend much more. This would have involved rapid liberalisation of its financial sector, to provide better returns on investment.