Yiping Huang of Peking University says:
So based on current trends, 2012 should see a soft landing in China. Affected by a sluggish external economic environment, export and import growth will likely halve to 9.8 per cent and 12.8 per cent, respectively. Reduction in net exports could reduce GDP by 0.4 percentage points.
Of the three key components of fixed-asset investment, manufacturing investment is relatively more resilient and infrastructure is more or less a function of government policy. Uncertainty surrounds residential investment, which is likely to slow significantly in the coming year, following sharp adjustment in both property prices and transaction volumes. Despite this, residential investment should continue to grow in 2012 — albeit at a slower pace — due to large development projects, ongoing construction and the expansion of public housing.
Domestic consumption will be key to maintaining the economy, although the pace of its expansion should also moderate. In recent years, retail sales have consistently outperformed GDP.
Read more: http://www.eastasiaforum.org/2012/01/01/china-will-2012-be-a-replay-of-2009/
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