BOFIT Forecast for China 2009-2011

China s economy slowed significantly as problems arose in connection with exports and private investment, but thanks to a sizeable stimulus package, a quick turnaround was achieved. China s GDP is expected to grow by about 8% in both 2009 and 2010 and by slightly more in the last year of the forecast period, 2011. The massive increase in lending associated with the stimulus package could lead to imbalances in the Chinese economy, which might make economic policy more difficult and constrain growth. The current stimulus measures have only reinforced the investment- and export-orientation of the economy, while domestic demand continues to play a minor role.