Many analysts say China engineered a "soft landing" last year, but they're wrong. The Chinese economy was coming in for a landing (by reining in runaway credit growth), but then it started to look like it was going to be a hard one, and they waved off (by opening the credit spigots again). Now they're coming around for the another try, with bank regulators promising to crack down on the reckless explosion in shadow financing that has already produced a number of defaults. We'll see, in the months ahead, whether China's leaders are serious about reining in risk and forcing a real economic adjustment, or whether they're hopelessly addicted to a credit-fueled investment binge. But they can't keep flying around forever. The meager returns to China's latest credit splurge suggest that the fuel in China's gas tanks is running out. The engines are already starting to sputter. Their instincts are to pull up, when they really should be landing the plane.

Barry Naughton:

Are tiny fluctuations in China's reported GDP growth rate actually significant? In one sense, the market's reaction is frivolous. China's GDP numbers are extremely imprecise, and variations of a couple tenths of a percentage point are well within the margin of statistical error. US GDP figures for the first quarter of 2013 haven't even been published yet, and after they are published they will be revised several times (and typically revised by amounts larger than the shift in Chinese growth being reported here). The idea that Chinese statisticians are accurately picking up tiny fluctuations in the overall growth rate is preposterous.

But it a broader sense, I agree with Patrick that the recent data from China is significant, and roughly for the same reason he lays out. Lurking in the background of the current numbers are the broader changes of which all Chinese economists are aware: the Chinese economy is ending its super-high growth phase; labor force growth has essentially ended; and China is facing a new era in which the underlying growth potential of the economy is less. This change is overall not a bad thing. The reason the high growth phase is ending is because China has graduated early. Increasingly a middle income country, China has higher wages and a more diverse domestic demand pattern. These changes reflect a higher standard of living and an economy with broader capabilities.

Damien Ma:

I think the chatter about the growth rate coming in a bit lower than forecasts reflects, in part, the fact that the market may not have fully adjusted to the reality of China being able to sustain growth in the 7 percent-8 percent range going forward.

Should the growth rate cause worry? There are always plenty of things to be concerned about in the Chinese economy, such as local debt and sporadic asset bubbles. But if it's true what the NBS reports, that more than half of the 7.7 percent growth came from final consumption, than that's actually a positive development. Others may have better numbers or find the NBS estimate not credible. Though we might not know for sure until the numbers have been fully digested.