• The government will focus on development needs in rural areas and in central and western provinces, in an attempt to prevent widening inequalities from producing a political challenge to the regime. Strengthening central control over the regions will also be a priority for the government as more money is disbursed from the center to the regions to fund welfare programmes.
• Xi Jingping, party secretary of Shanghai, would appear the current favorite to assume leadership of the Chinese Communist Party (CCP) from the president, Hu Jintao, in 2012 following his promotion at the CCP congress in October 2007.
• The integration of China into the world political system will cause tensions with the US, not least because the two countries' political perspectives differ sharply. Disagreements over Iran, Taiwan and Central Asia are likely. Relations with Japan will remain difficult, despite a recent easing of tensions. China will become more diplomatically proactive, especially in Africa.
• Real GDP growth is forecast to slow slightly but will remain impressive, easing gradually from 11.5% in 2007 to 8.3% in 2012. The government is attempting to boost the contribution of private consumption to overall growth. Efforts to support the urban and rural poor will increase their disposable income, and the growing trend for urban Chinese to buy homes and cars will also give a fillip to consumption spending during the forecast period.
• Investment spending growth will slow gradually from 2007, partly owing to higher interest rates from 2008. Low real interest rates in 2007 have helped prices for housing and securities to rise rapidly, raising concerns about a possible asset-price slump in the forecast period. The impact of such a crash would likely only have a limited and short-term impact on wider economic growth.
• The renminbi will continue to be held in a floating exchange-rate system managed primarily against the US dollar. Increasing volatility and sustained appreciation will be permitted throughout the forecast period, with the exchange rate averaging Rmb6.21:US$1 in 2012. The government will make gradual progress on the liberalization of the capital account.
• The current-account surplus will fall as a proportion of GDP during the forecast period, in line with a deceleration in China's export growth and continued strong growth in GDP. Services exports will be boosted by the 2008 Olympic Games in the capital, Beijing, and by the 2010 Shanghai World Expo.

US-China Business Council
http://www.uschina.org/

Internet Guide for China Studies: Business and Economy
http://www.sino.uni-heidelberg.de/igcs/igbiz.htm