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Merrill Lynch : five key trends in Chinese economy
20/4/2007 10:02

Merrill Lynch International has identified five key trends in China's economy in the 2007-2010 period, in a research report published as part of the proceedings of the Boao Forum for Asia (BFA) 2007 annual conference, to be held April 20 to 22.

The five trends are:

First, a boom in consumption. Income growth has been accelerating slowly but steadily, providing solid support for retail sales growth in China. Consumer credit will become popular.

Second, a continuing infrastructure boom. China will invest big money in railways, subways, airports, highways, energy and environment related infrastructure, as well as rural infrastructure.

Third, China's growth model will be refined. The tightening of land supply will force corporate China to move up the value-added ladder. China's determination to increase energy efficiency and environmental protection will be manifested in detailed measures including strict controls of new investment and higher resources taxes.

Fourth, a broadening of reforms. The anti-corruption campaign, financial liberalization and tax standardization will be the focus of reforms in the 2007-2010 period.

Fifth, corporate restructuring will speed up. To stay competitive, Chinese corporations will speed up restructuring featured by potential asset injections, vertical integration and mergers and acquisitions.