China's economic development in 2002

2002 was a significant year for China s economic development in many ways.The economy continued to grow rapidly in 2002.Domestic investment - particularly public investment - surged ahead.Home buying and private car purchases became the pillars of private consumption.Exports surged despite a global economic slowdown. Expansionary fiscal policy continued to be the main policy instrument to stimulate growth in 2002.Despite this strong performance, Chinese economic growth was also deflation-prone, jobless and profitless due mainly to the distorted structure of the economy.State-owned enterprises still dominate many sectors and enjoy preferential treatment such as easy access to bank loans. Policymakers face substantial challenges in sustaining high growth in the medium term.The leadership change and the restructuring of the state asset management system could have a significant impact on the outlook for 2003 and beyond. Key words: China, macroeconomic development, policy challenges