BEIJING, Nov. 9, 2009 (Xinhua News Agency) -- Given the external economic environment and domestic situation, China?s economy will focus on ?securing stable economic growth, adjusting the economic structure, and guarding against inflation? in 2010.
To balance between the objectives, China?s economy will inevitably confront challenges stemming from eight aspects, including economic growth, the price level, exports, consumption, investment, production capacity, the investment market, and employment.
-- Economic growth
Analysts hold that China?s economic growth may top 10 percent next year. If so, trouble will arise.
China?s economic growth averaged at 9.8 percent over the past three decades. A growth rate greater than 10 percent may overheat the economy, but if it falls below eight percent, things could become somewhat chilled.
The 9.8 percent historical average was realized with the help of a low-base factor and low domestic and international costs.
However, the internal and external costs of economic growth have greatly risen as international prices for oil and raw material have almost doubled and domestic labor costs continue to surge.
Besides, the base figure of China?s economy has become fairly high, and economic growth is expected to slow down within another three decades.
A nine percent growth prediction is, quite simply, high for China?s economy in 2010.
-- Price level Inflation in 2010 should be cautiously approached as real inflation may be even higher than what is reflected in financial reports.
On one hand, the international prices of oil, grain, and basic raw materials are expected to rise, together with flooded liquidity, will exemplify inflation.
On the other hand, subsequent capital for the investment mobilized by the four trillion yuan stimulus plan will follow up in the future. As investment is driving demand, and inflation?s base figure fell negative this year, inflation may quickly submerge next year, and may reach pinnacle mid-next year.
-- Exports Because China?s exports this year are expected to recede 17 percent year on year, they will post positive growth in 2010.
However, it is hard to predict whether China?s export prospects will be good.
The external environment for exports has undergone great changes, and those to developed countries in particular.
Since year-start, the US has launched 10 investigations including both anti-dumping and anti-subsidy, two investigations specifically targeting anti-dumping and one special safeguard investigation.
-- Investment
Some analysts are predicting that China?s fixed asset investments will growth 34 percent year on year, and the growth will come to about 25 percent in 2010.
Investment growth will be relatively high next year as part of this year?s investments will be put into place later this year or early next year, and subsequent capital will be required.
-- Consumption
Domestic consumption is a shining point this year boosted by stimulus polices for the purchase of home appliances and automobiles.
The huge potential for consumption has not fully released, so its prospects should remain optimistic in 2010.
However, one concern is that the contradiction between a low-carbon economy and current consumption philosophy, which doesn?t take into consideration environmental awareness.
-- Production capacity
The current crisis has led to a worldwide supply chain reshuffle.
Drastic changes in external demand, internal imbalances, and severe systematic problems are the source of China?s production capacity issues.
-- Investment market
A number of signs indicate that next year?s global investment market will not be smooth and steady.
Fluctuations in the investment market may go exceed expectations, so risks preventions in the commodities future market and securities market should be undertaken as soon as possible.
On top of that, the real estate market will be another origin of trouble next year.
-- Employment Employment is the largest challenge looming as it relates not only to the economy, but also to people?s livelihoods and the country?s social stability.
Therefore, employment should be strongly monitored while tackling problems in investment, exports, and consumption.
