JCap’s Anne Stevenson-Yang expects China’s growth to decline sharply this year as the country stops building empty cities (which are sometimes torn down, so they can be rebuilt to fuel growth again). But she thinks this reduction in investment-led growth could have less impact on the world economy than many expect. The losers will be heavy industry and commodities suppliers seeing declining demand from China. If there is a sudden adjustment causing a financial crisis in China, all bets are off and the impact could be felt across international bond and equity markets, currencies and trade and investment flows. GDP growth has been the engine of remuneration of China’s vast bureaucracy so the ascension to permanent power of Xi Jinping is consistent with the expectation that the growth era is over and there will be less cash generated for political supporters. Click below to request trial access to read the full report.