Crisis will hit China in the next decade

摘要

In almost any current discussion with government officials and executives of export-oriented companies in almost any country (except the US), the "China locomotive" phenomenon -the positive effects of the expanding Chinese economy - comes up. China's growth probably will slow somewhat in the next year or two. But that will be nothing compared with the crisis likely to hit in the next decade. How is it best to understand China's economy? The immediate problem for China's economic policymakers is like walking above a gorge on a rope bridge. If they lean too far to the (economic, not political) left, the economy will overheat. In addition to rising inflation, Chinese banks will be making more loans — new bank loans doubled during 2001-2003 (see Boom to bust cycles signal need for reform, page 95).