As Premier Li Keqiang guides China toward lower growth rates, economists everywhere are grappling with this question: How slow is too slow for the world's second-biggest economy?
Number-crunchers have traditionally believed that China must grow at least 7 percent to 8 percent annually to generate enough jobs and prosperity to keep protesters from flooding Tiananmen Square. But what if China is already operating at a significantly lower rate of output — more like 5 percent — without a significant uptick in unrest? And what might that mean for Asia's economic outlook over the next five years?
The consultancy Oxford Economics has created a "Li Index" that tries to estimate Chinese growth by using measures such as electricity output, credit growth and rail freight. Contrary to the official headline GDP number, those data suggest Chinese gross domestic product growth has been stumbling along under 5 percent for a few months now. While some may quibble with the index's emphasis on heavy industry, the fact is that official Chinese GDP and trade data aren't a whole lot more reliable.