Up to now, China economic growth is being supported by stimulus, but is set to edge down further to 6.1% by 2018. At the same time, risks are rising. The economy is undergoing transitions on several fronts. Private investment will be reinvigorated by the removal of entry restrictions in some service industries, but held back by adjustment in several heavy industries. Housing prices are again rising fast in the bigger cities, but working off housing inventories in smaller cities will take time. Consumption growth is set to hold up, especially as incomes rise and urbanisation continues. Reductions in excess capacity will ease downward pressure on producer prices but consumer price inflation will remain low. Import demand for goods will be damped by on-shoring, while services imports, in particular tourism, will grow rapidly. Exports will be held back by weak global demand and loss of competitiveness.

The following statements are current situation in China economic development

1.Fiscal policy, including via the policy banks, is very expansionary. 

2.Monetary policy prudence is called for so as not to aggravate imbalances. 

3.Removing implicit public guarantees and ending bailouts would make for better and more market-based pricing of risk. 

4.Corporate debt has risen substantially to high levels and the enterprise sector therefore needs to deleverage. 

5.Supply-side reforms to cut excess capacity need to accelerate and bankruptcy of zombie firms be made easier. 

6.Leveraged investment in asset markets should be contained and monitored.

7.Public investment should focus on efficiency and avoid crowding out the private sector. 

8.New revenue sources, such as property taxation or a more progressive personal income tax, can be used to meet increasing spending needs for public services and social security. 

9.Fiscal relations across government levels should be revamped so that local mandates are adequately funded.