How China's economic slowdown could affect the UK

China's economy is slowing but it's still growing at a colossal pace - 6.9% in 2015 compared with 7.3% the year before.

GDP growth of 6.8% between October and December is the weakest in 25 years but pessimists had forecast far worse. Manufacturing and construction output slowed, growth in the services sector looks reasonably robust.

ITV News Business Editor Joel Hills reports:

China's government promised 7% growth as it attempts to re-balance the economy away from a dependence on exports towards an economy driven by China's consumers.

The official figures suggest that everything is largely going according to the central plan - that's if you believe the official figures. Many investors clearly don't.

Already this year China's government has intervened to support both the stock market and China's currency. The clear anxiety is that this slowdown may be the start of something more serious.

Not many of us own shares in China's companies but what happens in China matters very greatly. The performance of the world's second largest economy affects the prices we pay in Britain, the money we earn , the profits our companies make, the interest we pay to borrow money.

We are already experiencing the impact of China's slowdown. Oils price have fallen leaving most of us feeling better off while creating havoc in the North Sea. Steel prices have slumped, triggering a wave of job losses in what's left of Britain's steel industry.

The greatest worry is another financial crisis may be looming. Since 2008, while Britain and other advanced economies have been going through a period of belt-tightening austerity, China has been riding an investment boom. Skyscrapers, airports, motorways, railways, power station is have been built using borrowed money.

As demand for China's goods diminished, China's government ordered its banks to open their wallets.

Debt levels have soared to a extent that isn't completely clear as a shadow banking system has been allowed to emerge. If China's growth slows significantly loans may start to curdle to devastating effect.

China's latest set of growth figures are ultimately inconclusive. No one really knows how this process of re-balancing will play out.