One of the most popular theories of the 'there is trouble coming in China' devotees is the one about economic growth. These gloom pundits see the signs of slowing growth and predict trouble ahead. Fewer jobs and insufficient new investment will create political pressures that the Communist Party will be unable to resist, say those who subscribe to this idea. China needs to maintain fast growth for stability, you see. Without growth, the economy and society will go off the rails.

Looking further ahead, the most popular theory concerns innovation, or rather the lack of it. Without more creativity, those with the black-tinted spectacles say, China's economy will stall. The seeds of failure are not just planted but already sprouting, for all to see, through the barren soil of ideas. But the doom-sayers are wrong on both of these counts.

China's slowing rate of growth may not be a problem at all. It may even be welcome. The pace of economic expansion is certainly going to fall this year, and sharply, to something around 7 per cent or 8 per cent. This is much lower than the heady 10 per cent or 11 per cent of a few years ago. While the Chinese economy's rate of progress will remain multiples ahead of almost every other country in the world, it is likely to fall even further next year.

With so many people needing jobs, many ask how the country will cope. They say the rate of unemployment will rise from its already high level, spreading misery and discontent. Wages will rise, too, creating inflation and making the country less attractive to foreign investors, starting a spiral of decline.

Yet rising wages will be a welcome development for most mainlanders. They will be happier. Investors thinking of shifting production away from China have few alternatives. They can shift farther inland, which would be good for China, too. Or they can move to Bangladesh or Indonesia or Vietnam, where the infrastructure is less developed. Another option is to go back home.

Some investors will probably pull back. But with so little growth in the rest of the world and few countries with the attractions offered by China, more will surely come. And even if they bring fewer jobs, slowing rates of work creation may not matter at all.

According to German finance group Allianz, China's labour market is about to reach a turning point either this year or next. Rather than expanding, the number of people of working age, those between 15 and 59, will begin to shrink. At the peak, there will be 920 million people of working age. But every year after, that number will fall, reducing the need to create more jobs.

Rather than being a problem, China's slowing economic growth is likely to be good news. It provides an opportunity to raise living standards further and a welcome breather to sort out some of the problems caused by so many years of heady expansion. Also, it comes at the right time demographically, when the pressure to find jobs is waning.

It's true this could be interpreted as a problem. Productivity will decline as the population ages, setting China up for the kind of economic stagnation Japan faced. But whereas Japan's population started ageing when the country was at the top of the technology ladder, China is still many rungs below.

This means China has a lot more room to grow in terms of the technology and processes used in each job. The country should be able to offset a diminishing labour force with the rising productivity of individual workers. Meanwhile, the fact that fewer people will be competing for jobs will give China a degree of political stability.

Similarly, charges that China is not innovative tend to miss the mark. Accusations thrown at China that it lacks creativity tend to lack creative thinking. They look at China's tendency to copy and at the low level of added value in many factories, and conclude that this is simply not good enough. The country cannot progress much further with this shoddy model of development, they say.

The same critics point out that while China may have registered lots of patents in the past few years, most are of questionable quality or use. Plagiarism frequently plays a part in their development, too.

An article in The New York Times in November pointed out that on the list of the world's 100 most innovative companies, not one was Chinese. In particular, China needs to develop skills in semiconductor technology, chemicals and software if it is to get into the top innovators' list. Chinese firms need ideas with global relevance and global application, the authors said, if they are to become truly innovative.

Yet China is not unusual in having few leading producers in these segments at this stage in its development. The same brickbats were once thrown at South Korea and Japan, yet both have achieved much technologically in these sectors in the past 20 years.

Moreover, perhaps the measures of innovativeness being used by these critics are wrong. Certainly, a visit to any modern art exhibition illustrates very clearly that China has plenty of creativity. The country's position as one of the finest sources of contemporary art is well deserved.

It takes time to acquire the basic skills needed to be innovative in the way The New York Times thinks is important. China is learning these fast. It already has a largely successful space programme and is developing an aviation sector. It is home to the world's second-largest producer of telecoms and internet equipment - hardly a simple metal-bashing business - and the world's second-largest manufacturer of personal computers.

Baidu provides search technology for the world's largest national online community and is one of the world's main rivals to Google, while QQ is one of the largest competitors to Facebook. Hong Kong and, especially, Taiwan are home to highly successful and innovative firms, too, particularly in the technology sector.

Chinese firms are often highly innovative in their approach to business. Products are often better designed to meet the needs of the local market. They are typically brought to market faster than those of their Western rivals, and Chinese business models are less dependent on the high margins demanded by Wall Street. These are structural innovations and advantages.

When Unilever introduced an instant tea in China a few years ago, it was astonished to find it had 18 competitors within weeks, many of which were offering tea packaged more conveniently with milk and sugar, and at lower prices. When white goods maker Haier found rural workers were being forced to decide between a machine to wash clothes or one to wash potatoes, they made one that did both.

Besides, what is innovation? Is it an iPad, a product that comes from a company bringing together technologies, none of which it invented? Or is it doing whatever is necessary to provide progress in the face of stiff competition?

If it is the latter, then China has no shortage of leading innovators.

Economist Graeme Maxton's latest book is titled The End of Progress: How Modern Economics Has Failed Us