China's growth remained stuck in a slowing trend in the first quarter of 2015, but it does not necessarily mean that the economy has moved from boom to bust.
An economic cycle normally involves back-and-forth movements between a state of strength and a phase of weakness. And within periods of weak economic activity, a slowdown in the economy generally accompanies a slide in overall demand.
However, the current slowdown in the economy mainly reflects oversupply in the fields of low-end manufacturing and resources, while the high-end manufacturing industry and the services sector still retain their growth momentum.
The relatively high growth rates in some regions of the country where the local economies have just recently taken off or industrial restructuring is well underway also indicates that a fall in overall demand has yet to be seen.
Therefore, the economic slowdown is mainly being caused by the structure of a manufacturing sector that is failing to meet the needs of the Chinese people, who have grown more affluent in recent years and naturally demand products and services of higher quality.
It's commonly believed that the manufacturing sector is going through a transitional period, but consolidation, especially in the higher-end segments, is only at an early stage.
The removal of industrial production overcapacity has made room for restructuring, but only when there are several well-recognized high-end domestic manufacturers will we be able to say that the transition has come to fruition.
