A precarious balance

Article Abstract:

Indicators show China to be in excellent economic shape, but unresolved problems must be addressed if China wants to maintain economic health. Tight credit and strict pricing have controlled growth and reduced inflation. Bank deposits, securities markets investments, and foreign investment continue to grow. However, the majority of loans from state-owned banks continue to go to inefficient state enterprises rather than privately-run firms. And production is outstripping demand, which could lead to a recession. In addition, imports are up, substantially reducing the trade surplus.

Economic Programs, Administration of Economic Programs, Economic policy, Economic development

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Demand crunch

Article Abstract:

China's GDP growth fell to 8.8% in 1997, from 9.7% in 1996, mainly a result of a decline in consumer demand. Economists expect consumer demand to continue to decline in 1998, while investment will also slow down. This situation is very serious for China, as it requires high levels of growth to ensure that social unrest does not become widespread and that employment is available. Economic difficulties could also hamper efforts by President Jiang Zemin to restructure state-owned companies.

Personal Consumption Expend, Consumption (Economics)

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Easy does it

Article Abstract:

China is encouraging foreign companies to invest, which has resulted in a record $37 billion in 1995, but caution should be exercised. Although it appears that China's economy is strong, foreign investors should be concerned about higher prices, higher inflation, and the country's debt. China is easing its credit restrictions, which could trigger inflation. Consumer prices rose 12.7% during the first three quarters in 1995, and triangular debt increased 23% to $96 billion in 1995.

Foreign investments

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