China Review News (CRN) recently republished an article by the deputy dean of the School of Economics of Fudan University, on the risks to a volatile economy. The article summarized the external elements that may bring risks: 1) unexpected changes in the international environment, such as the recent Arab Revolution; 2) unexpected economic recovery in the developed countries, of which the United States is the leader; 3) the continued existence of some old problems that caused the global financial crisis.
The article also identified the internal causes of risks: 1) complicated pressures leading to inflation; 2) the pressure of economic structural adjustments; 3) pressure caused by domestic market friction. The article concluded that the current approach to controlling inflation, which is based solely on currency policies, needs to be adjusted, and that effective implementation of policies requires understanding and support from the general public.
Source: China Review News, February 25, 2011