Chinese economy ‘facing growth challenges’

<p>A number of challenges are facing the Chinese economy.</p>

The Chinese economy is coming under an increasing amount of pressure and there are many challenges it faces if it is to continue to grow.

Legal & General Investment Management's emerging market strategist Brian Coulton explained some analysts believe the fast pace of growth in the last two decades means a "hard landing" could be on the way for the Chinese economy.

"While understandable, China has a significant advantage as it still has a sizeable current account surplus and domestic savings, making it less vulnerable to foreign funding," he said.

Mr Coulton's comments come only a short time after the International Monetary Fund announced it is lowering its growth expectations for the Chinese economy.

First deputy managing director David Lipton suggested the country's economy could grow by 7.75 per cent in 2013 and 2014, which would be a slowdown as it recorded an expansion of 7.8 per cent last year.

Mr Coulton said maintaining demand without leverage expanding will be the key to sustainability of future growth in China and the nation's administration understands this.

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