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A Socialist Market Economy With Chinese Contradictions

China confounded widespread expectations of a sharp slowdown in economic growth in 2016. But the longer China's credit boom continues, the less likely it will be that policymakers can achieve a smooth transition to a sustainable economic path.

LONDON – The year 2016 ends with slightly higher forecasts for global growth and inflation. In part, that reflects expectations of a big new fiscal stimulus in the United States under President Donald Trump. But equally important is the strength of the Chinese economy, with buoyant industrial production fueling a sharp rise in global commodity prices.