In response the Chinese government may be forced to:
- Increase interest rates
- Allow an appreciation in the exchange rate.
Both of these will help to slowdown the economy.
However despite growth rates in double figures there are concerns that there are still significant problems with the Chinese economy.
1. Growing levels of inequality between south (manufacturing, urban) and the north (agricultural sector - rural)
2. Continuing levels of unemployment created by the privatisation of previously inefficient state owned enterprises