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Abstract
There will be rising uncertainty in the overall external environment for the development of the Chinese economy in 2007, although there will be no material changes in the fundamentals underlying its sustained and rapid development. First, the scale of investment was considerable and continues to expand rapidly. Second, China benefits from a large domestic consumer market. Third, there is no fundamental change in the systemic and mechanical factors that are contributing to Chinas high-speed investment growth. Fourth, the Chinese economy is subject to an administrative cycle that is significantly influenced by political forces. Therefore, it is inconceivable for Chinas economic growth rate to experience a sharp decline. To prevent an already rapidly growing economy from overheating and structural increases from becoming visible inflated in 2008, the key is to control the economic growth rate, emphasising control of rapid investment growth and sharp rises in commodity prices.