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Five Economic Challenges that China Faces

Daily Economic News predicted five macro-economic challenges in 2015; these will come primarily from external pressure and from internal economic drivers losing steam. 

First, an increase in money supply may not be sufficient to help revive businesses. Second, exports continue to decline. Of the economic drivers, exports have been the first to lose power. Third, as banks tighten credit, the demand for credit will be difficult to satisfy. Thus the probability of default will increase. Fourth, real estate developers will not reap the high returns that they did before and will be very cautious. A high inventory in the housing market also de-incentivizes new starts. Fifth, the central government is tightening local governments’ programs so as to reduce local government’ debts. Without the endorsement of local governments, private investment in city infrastructure will not be able to obtain favorable extensions from the bank to handle their debt servicing, thus increasing the likelihood of default. 
Source: Daily Economic News reprinted by Study Times, January 26, 2015