chinese economic forecast, Outlook for 2009-10

The government's main priority is to support the economy, amid concerns that rising unemployment could increase social unrest. However, even if unrest grows, it is unlikely to create a nationwide anti-government movement.
Accountability will improve within the ruling Chinese Communist Party, but wider reforms to increase democracy will not occur. The government's campaign against official corruption will intensify.
The Economist Intelligence Unit expects real GDP growth to slow sharply owing to the global economic downturn. In 2009 real GDP will grow by just 6%. Growth will recover in 2010, but only to 7%.
The economy will be supported by a rapid expansion in government infrastructure spending and policies to revive housing investment. However, this will lead to a substantial rise in the budget deficit.
Amid slowing demand and falling commodity and food prices, consumer prices are expected to decline by an average of 0.2% in 2009.
Despite the poor outlook for exports, falling commodity prices will depress import values. As a result, the trade surplus will remain huge. The current-account surplus will narrow to 6.1% of GDP in 2009 and 4.5% in 2010.