What China's Slower Growth Means for Investors

TAIPEI (TheStreet) -- Each year, scribes and analysts eagerly await China's annual economic growth figures to see if the country's growth domestic product went up by double-digits, or since 2011, to see by how many percentage points it has moderated.

I wasn't around to see whatever frenzy took place Monday before the National Bureau of Statistics news conference in Beijing, but I imagine a lot of tails between legs once the bureau announced that the economy grew 7.7% last year, about the same as it did in 2012.

The announcement shows, as widely suspected, that China must rely less on factory output, export shipments and new infrastructure compared with the decade before 2011, and that China hasn't found a viable replacement. The government says it wants to shift to a more structurally sound, albeit slower growing, economy. It's still too soon to see the outcome.

What that means for the foreign investor: Don't pounce on anything risky.

The GDP increase that comes in below the 9-10% range that defined China's first decade of the century shows that the country continues to run on the fast-growth engines of the past.

A boost in consumer spending remains an official economic reform priority through next year, because more consumption implies a wealthier and more stable population and less reliance on Western markets. But consumption has failed government dreams because China is still a nation of careful bargain hunters.

The old formula of export manufacturing plus investment in related infrastructure kept growth at a still enviable figure last year, pushing the economy to $9.31 trillion but expanding it more slowly than before because of rising costs, tough credit and uneven demand from world markets.

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