Even before the recent plunge in commodity and stock markets, the world economy was weak. But recent data from China, Europe, Japan and other countries suggest that growth is slowing more sharply than many analysts had anticipated. That puts the burden on policy makers in these countries to come up with more credible ways to bolster their economies.
The most worrying signs are coming from China, the world’s second-biggest economy. After two decades of rapid growth, China’s economy is decelerating and its leaders are failing to strengthen it — by, for instance, decreasing its reliance on investment and putting greater emphasis on consumer demand. In a sign of how quickly business activity is falling, exports declined more than 8 percent in July from June and auto sales were down more than 6 percent compared to a year earlier. Gross domestic product grew at 7 percent in the second quarter, the slowest pace in six years.