As growth slows, China's shifting economy mints some US corporate winners, others losers

China is losing its appetite for dump trucks, iron ore and construction cranes. But the Chinese still want to travel and give their kids a better education.
Growth in the world's second-largest economy is decelerating and rattling financial markets around the world. Behind that slowdown is an evolutionary shift in China's economy — from a dependence on exports and investment in factories and housing — to a reliance on spending by its emerging middle class.
That transition, a gradual and perhaps painful one, will affect which U.S. companies stand to benefit and which will be squeezed as China's growth slides from the double-digit annual rates of the mid-2000s to 7 percent, 6 percent, maybe even less.
The shift is likely to pinch American manufacturers that prospered during China's investment boom — makers of heavy construction equipment and industrial machinery, for instance.
But the service sector — a broad category that includes things like restaurant meals, haircuts and hotel stays — remains "reasonably robust" and has been a dominant driver of China's growth since the first half of 2012, said economist Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics.
"Our companies have seen their top-line revenue growth slow along with" the Chinese economy, said John Frisbie, president of the U.S.-China Business Council. "It's still pretty good. It's outpacing other emerging markets ... Most companies feel like China will continue to grow."