Down again.
Photograph by Greg Baker – Getty Images

The real reasons to worry have nothing to do with the markets.

By Anne VanderMey
July 24, 2015

Over a three-week period this summer, China’s stock market plummeted 30%—erasing a staggering $3 trillion in value. The fallout? Not so bad. China’s markets are smaller than in the U.S., most households don’t have any exposure to them, and they’re more prone to booms and busts. The more pressing question lies in whether the country can make a smooth transition away from a manufacturing economy and cool its rapid growth without triggering other economic problems—this time with real global ripple effects.

1990: The last year China’s GDP growth was below 7%, as is expected this year—and every other year for the foreseeable future.
286%: China’s debt-to-GDP ratio. It’s higher than any other developing nation’s, and is largely tied to the overheated real estate sector.
44: Countries that rely on China as their largest export market (quadruple the number a decade ago), and that could be vulnerable to slowing growth.

A version of this article appears in the August 1, 2015 issue of Fortune magazine with the headline “There are reasons to worry about China. Its stock market isn’t one of them.”

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