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
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.