A slowing China economy is a global concern

China’s $18tn-plus economy is a key driver of global growth, but fears of an economic slowdown have gripped the country.Expansion in the world’s second largest economy has already been sputtering amid sluggish consumer spending, a shaky property market, flagging exports amid a US drive for "de-risking,” record youth unemployment and towering local government debt.The impact of these strains is starting to be felt around the globe on everything from commodity prices to equity markets.As the world’s second-largest economy, a weaker growth trend in China would have an impact on almost every country.When China’s growth rate accelerates by 1 percentage point, other countries benefit by about 0.3 percentage point, according to the International Monetary Fund (IMF).Countries like Australia and Chile, which export raw materials such as iron ore and copper, are usually affected the most.China is also a big buyer of oil from the Middle East, and tech products from its East Asian neighbours.Foreign businesses that operate in China, from Volkswagen to Nike and McDonald’s are vulnerable to slower revenue growth and lower stock valuations.Countries around the world that welcome Chinese tourists may see less spending.For the US, which remains China’s biggest trading partner, a slowdown in the world’s second-largest economy can help lower inflation, but probably not by enough to move the dial for the Federal Reserve, unless there’s a hard landing in China.It also means China’s economy may never overtake the US on a consistent basis, according to Bloomberg Economics.China’s economic troubles mainly boil down to one key word: Property.This sector has been slumping since 2021, after Beijing tightened credit to large developers and told banks to slow mortgage issuance.Housing - together with related industries like steel, cement and glass - accounts for about 20% of the country’s gross domestic product.Goldman Sachs Group estimates the housing downturn will reduce China’s GDP growth by 1.5 percentage points this year.China has taken a series of incremental steps to boost its economy, but Beijing isn’t pulling out a "bazooka” stimulus package - something measured in trillions of yuan - like it did during the global financial crisis in 2008-09, or even when the pandemic hit in 2020.Much of the reluctance lies in a drive by the government to control the growth of debt in the country, especially at the municipal level; a desire to shrink the property sector’s outsized influence on the economy; and an aversion to doling out cash to consumers, Western-style.Slower economic growth in China could reduce Beijing’s global influence if, for instance, it cuts back on lending to developing nations.Policymakers in Tokyo believe China’s deepening economic woes could hit Japan’s fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus, potentially delaying an exit from ultra-loose monetary policy.In a sign of growing pessimism over China, the government said its economic report for August that "concern over China’s outlook” was among risks to Japan’s recovery.China is Japan’s largest trading partner, accounting for 20% of its exports, having replaced the US in 2020.Exports to China fell 8.6% in the first half of this year as demand for cars, steel and electronics wilted.Economists believe China’s downturn could knock 1-2 percentage points off Japan’s annual growth, fuelling fears of a prolonged slowdown in Asia’s two biggest economies, which combined account for about a fifth of global GDP.The IMF forecasts China will be the top contributor to global growth over the next five years, with a share expected to represent 22.6% of total world growth — double that of the US.A lot of the world’s jobs and production depend on China, with its vast market and factory floors.