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China's growth and its internal and external challenges

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  1. The operations of annihilation: Actions tailored to the strategic problems of the revolutionary war
    1. Problems and specific features of the Red Army
    2. The dualism of operations of annihilation:The weakening of the enemy combined to strengthen the Red Army
  2. The refusal of passivity: necessary condition for the implementation of the actions of annihilation
    1. The role of the population for the military offensive
    2. The number and mobility for the success of the offensive

The Chinese economy has seen an unprecented growth in recent years. This growth has been nothing like it has seen or known in its history. With the dynamism of investment, the rise in consumption, and increasing trade surpluses, there was little reason to doubt that China would maintain a growth of around 9-10% per year.

According to many economists, the Chinese economy has springs that will allow it to grow at a rate of 6 to 7%, until the year 2020. However, this scenario brings into picture the various challenges that China will have to face. These challenges will both be internal and external.

The Chinese government has begun taking notice of these challenges, and is carrying out reforms, but, it is not enough. Given these uncertainties, there is one question that we will focus on: What are the growth prospects that China has?

The Chinese economy since 2002 a period of growth as it has ever known in its history.Officially about 10% per year growth rate of GDP is actually probably in the range of 12-13%. Industrial production and foreign trade tripled in five years. Despite the fears raised regularly in the media by "overheating Chinese" and its corollary "the risk of hard landing," we must recognize that so far the Chinese economy has shown a remarkable robustness.

Despite some tightening of economic policy of the government and despite the sharp rise in commodity prices, growth has so far shown no signs of slowing down 10.1% in 2004 10.2% in 2005 and even 10.9% in the first half of 2006.

On the surface, the imbalances are contained: inflation does not exceed 2%, public debt is very reasonable (even the budget deficit should fall below 1% of GDP this year) and corporate profitability, although ' slightly down today, remains a very significant (profit rate of 6% of revenue on average, twice that in the late 90s).

In this context, needless to say that the prospects for short and medium term the Chinese economy remain resolutely positive: the consensus is for growth of around 10% in 2007.

The economic takeoff of China since the beginning of the reform era challenges so comparisons across the country's history but also from other "Asian miracle". In 25 years, parity of purchasing power, the wealth created by China from 4 to 14% of the world total, equivalent to a third catch of the ground lost on the 200 years that have before.

Cement production was multiplied by 8, 5 by electricity, steel by 4. Despite population growth, per capita wealth continues to rise on a trend of 7 to 8% per year. The GDP of China is similar to that of France, of about 1.65 trillion dollars in 2004 and China is now the fourth largest economy.

Three transformations are the basis of current economic development of China's gradual transformation, but not yet completed, a centrally planned economy to a market economy, the transformation, not yet complete, an economy based on agriculture in an economy based on industry and services (growth in China based on an industrial strategy) and the transformation of a closed economy into an open economy.

Tags: China; economy of China; China's growth; internal and external challenges

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