"Be not afraid of growing slowly, be afraid only of standing still," goes an old Chinese proverb, and China's economy appears to be holding true to the adage as experts say it will, despite slower growth, continue to be a deciding factor in shaping fiscal policy and the movement of capital throughout the world in 2016.  

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China will be the single most dominant influence on the course of the global economy next year, experts have said, but this time it will not be simply about an economy that is slowing down.

Following the collapse of China's stock market, flagging trade and the effects of a currency devaluation gone wrong, Beijing's policymakers had earlier this year taken steps to stimulate the economy, easing financial constraints on business and pouring billions into infrastructure development.  These remedial measures have begun to work.  Investments are picking up, and production appears to be following suit.

Recently, the Chinese government unveiled a 2016 economic plan that basically seeks slower but more sustainable growth rates, with some strong emphasis on consumption. This will be good for China in the long run, but it is bad news for the market over the short term. 

Francis Cheung, head of China-Hong Kong Strategy for Credit Lyonnais Securities Asia, says it will take two to three years for China's economy to stabilize.

"Unfortunately, that's not good for the market," Cheung tells the Los Angeles Times.  "There will still be a volatile market in 2016." 

The foremost question on the minds of people at the moment, however, is how much the Chinese renminbi will depreciate over the course of the next 12 months.  The currency's inclusion into the IMF's supplementary foreign exchange reserve takes effect in October 2016.

Cheung says Beijing's policymakers have all the incentive they need to keep the currency stable, and most analysts say the global economy might be able to manage an orderly devaluation. 

But there are those who fear that a competitive devaluation by Japan or a decline in the euro may prompt a more precipitous drop, which could, in turn, trigger a protectionist response from U.S. policymakers.  This kind of reaction will be especially likely in 2016, which is an election year in the United States.

While the U.S. "tradeable" goods sector is small in relation to America's overall economy, the Financial Times reports that U.S. exporters exert considerable influence on decision-makers in Capitol Hill.

On the foreign investments front, analysts have predicted that China will be looking to make bigger deals overseas even as the domestic economy begins to stabilize in the second half of 2016.       

Outflows from China had in the past tended to stay below $200 billion a year.  But China's tycoons have lately developed an appetite for outbound investments, including huge merger and acquisition (M&A) deals in Europe and the U.S., among others.  Fitch Ratings estimates that some $590 billion moved out of China in the 12 months through June this year alone. 

The country's big corporations continued on their buying spree six months on, boosting the value of the Asia-Pacific region's outbound deals to a staggering $1.2 trillion this year.  Moving into 2016, the spree may lead to speculative bubbles not only in the narrower markets of the developing world, but also in wealthy nations, according to the Financial Times.   

Clearly, China's fiscal and economic policymakers have a lot on their minds right now.  There are decisions to be made, and experts say the outcome will weigh heavily on friend and foe alike.

Meanwhile, trading partners across the world are watching China with bated breath, with some no doubt hoping that its leaders will remember the old Chinese proverb that goes, "Do not remove a fly from your friend's forehead with a hatchet."  

Tagsglobal economy, Credit Lyonnais, IMF