PROJECT M
 

Growing divide

China could suffer from its overheated housing market, but not in the way some imagine, argues Peng Wensheng, chief economist at CICC

© Alessandro Digaetano

Growing divide

China could suffer from its overheated housing market, but not in the way some imagine, argues Peng Wensheng, chief economist at CICC

Peng Wensheng on China’s economy

Inflation: while CPI inflation (currently 5.1%) may rise with cyclical conditions, it could fall below 4% in the second half of 2011. Growth: projections for 2010 saw economic growth at 10.2%, for 2011 around 9.5% as a result of policy tightening. Currency war: a colorful term, but not an accurate description. The danger is that hyperbole could lead to protectionism. Compromise and cooperation should prevail. Yuan as an international currency: China clearly wants it to play a major role in international trade and financial transactions, but for this to occur there must be further relaxation on capital account controls and convertibility within the next few years.

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