BOFIT Forecast for China 2014–2016 / 2

Abstract

Chinese economic growth, which has been below 8 % p.a. already for two years, will slow further in coming years. We retain our earlier view that GDP growth will remain around 7 % this year and next, and then fall to around 6 % in 2016. Success in China’s soft landing, however, will depend largely on the government’s ability to rein in indebtedness of businesses and local governments, as well as implement bold reform policies that foster new growth engines and appropriately manage risk. Due to changes in China’s growth model and structural reforms, occasional market disruptions are likely.