Crucial period of change

Slower growth and increasing inflationary pressures mean China needs economic restructuring to ensure healthy development

The Chinese economy has arrived at a crucial stage of all-round structural adjustment. In the coming two or three years, companies will start to feel the pressure as economic growth will continue to slow and there is likely to be moderate inflation of between 3 to 5 percent. Given this, it is essential that the country presses ahead with structural reforms.

China does not need to worry about a hard landing of its economy, because with its average per capita GDP only $4,000 the economy still has lots of room to grow. China is a big economic power with an extremely large domestic market. Its relatively poor and underdeveloped west, for instance, can take over production capacity from the east, and digest much of the excessive production capacity now haunting the national economy as a whole.