China continues to dominate discussions about the health of the world economy. Many are concerned about the country’s slowing growth and its ability to manage the difficult transition from a controlled economy dominated by manufacturing to a more open economy with greater reliance on domestic consumption. Some policy decisions last year also scared the market.
While the risks are many and real, they are manageable and well-understood by China’s policy makers. This is not the time to sell China short.
The government is determined to achieve its average 6.5 per cent growth target between now and 2020 and it has the means to do so. We expect increased investment in regional development, support for production of higher value goods, and improvements to infrastructure.