China’s Coming Growth Tests

BEIJING – The most recent official data show convincingly that the Chinese economy has bottomed out, and it is now widely expected that annual GDP growth should reach roughly 7.8% in 2012. This result should come as no surprise.

To rein in rising house prices and pre-empt the inflationary impact of the strongly expansionary fiscal and monetary policies implemented during the global financial crisis, China’s monetary authorities began to tighten financial conditions in January 2010.