China's economic slowdown — from a nearly 10 percent annual output gain in 2007 to below 8 percent today — has fueled widespread speculation about the economy's growth potential.
While it is impossible to predict China's future growth trajectory, understanding the economy's underlying trends is the best way to derive a meaningful estimate.
Whereas short-term demand largely dictates an economy's real growth rate, its potential growth rate is determined on the supply side. Some economists — citing indicators like investment ratios, industrial value-added and employment — compare China to Japan in the early 1970s.