Should UK investors care about this? The answer is both yes and no.
The raw numbers suggest this is no problem from a parochial perspective. Last year, the UK's exports to China amounted to a mere £12.4bn, which is just 0.8 per cent of GDP.
This, though, understates our exposure to China. For one thing, although we don't export much to China directly we do export to economies that do, so we stand to lose from knock-on effects. And for another - as we saw last week - UK shares, and especially mining stocks, are sensitive to sentiment about global economic growth which depends in part upon Chinese growth.
There are, however, at least three mechanisms that help protect the UK - and western economies generally - from a Chinese slowdown.
■ Commodity prices. Insofar as these fall in response to China's slowing economy, the real incomes of western commodity users will rise. This is a powerful effect. Warwick University's Andrew Oswald has shown that lower commodity prices help to reduce unemployment.
■ Wage competitiveness. One reason why China is slowing is that years of rising wages have reduced its cost advantage. But this is good for other economies. It means that ultra-low wage production can shift to other Asian economies such as Bangladesh or Vietnam. It could also mean that western companies will 'reshore' production to their home countries, to take advantage of better oversight of production. John Hawksworth at PwC believes this could add significantly to UK output in the coming years.
■ Policy response. If these two mechanisms aren't sufficient to support growth in the face of a slowing Chinese economy, the solution is simple - an easier monetary or fiscal policy.
In these senses, western economies are insulated from China's slowdown.
But there are other senses in which investors are exposed to it.
One is simply that a world in which China is growing at 5 per cent a year (or less) with that growth driven more by consumption and less by exports would be one we are not accustomed to. This alone might be bad for global equities simply because it is an uncertain prospect and the cliché is right - investors hate uncertainty.
The other is that China's shift towards consumption-led growth would end what Michael Dooley at the University of California Santa Cruz has called the "Bretton Woods II" global financial system. If China stops running trade surpluses, it will no longer need to buy so many western government bonds. This falling demand for bonds would be exacerbated to the extent that falling prices of raw materials reduce the current account surpluses of commodity exporters.
This would tend to raise government bond yields. While this would be most welcome for those of us approaching the age at which we're thinking of buying annuities, it might have three adverse effects:
■ It would tend to raise borrowing costs generally and so, at the margin, reduce corporate investment.
■ Western governments would become keener to tighten fiscal policy, given that the costs of borrowing are higher; the maths of debt sustainability are nastier, the higher are interest rates.
■ Higher long-term interest rates, in theory, mean that the discount rate we attach to longer-term cash flows is higher. This should be bad for equities generally, and especially for growth stocks which offer more future cash flows. This mechanism hasn't been much in evidence in recent years, in part because long-term interest rates have often fallen when investors have been risk averse which has tended to depress shares. But we did see it in the 1980s and early 90s, and it could return.
On balance, I'm not sure that China's slowdown and rebalancing must be bad for UK equities generally. But it could favour stocks that are more domestically-oriented, less sensitive to sentiment and less reliant upon stories of long-term growth.
