The Chinese market will continue to maintain its high growth for next 20-30 years. The growth may not be in the region of 12-15% but will be more in the 7-8% segment as there is big potential for further expansion.

The 30-year high economic growth China has had so far is unique as it has been stable without any major crisis unlike other economies where growth has been cyclical.

This was the macro economic picture of China presented at the Business Innovation Forum under the patronage of Ericsson at the Shanghai Expo. Dr Fan Gang, director of the National Institute of Economic Research and chairman of the China Reform Foundation allayed fears about the Chinese economy being overheated and the asset bubble. These challenges were part of a high growth economy but the momentum is strong and nobody cares about inflation, Fang pointed out.

He reckons China will get through these problems, as it had been active in putting the brakes on this high growth momentum to cool the overheating. ??Inflation and the asset bubble were handled by the government in time and much before the crisis came in. If you can prevent the big bubble then you will skip a big crisis. Smaller bubbles are fine and China is learning its lessons from the global crisis and the Japanese economy. The government has been active and positive about preventing big bubbles and hence big crises??, Gang said.

China has been on the job since 2007 to cool the asset bubble and it is in a stronger fiscal problem. All banks were in good position so when the crisis came there was no credit crunch and people were confident and continued peak expansion.

Gang also expected some revaluation of the Chinese Renminbi as it was in China’s self-interest to have a flexible regime. With Euro devaluation, the Renminbi is now more balanced with the Euro, however, revaluation against the dollar is a political issue, Gang said. He preferred to see a gradual change rather than a one-off big jump. ??Earlier the better. If we want a gradual change we have to start as early as possible as situation is getting more complex than before,?? Gang said.

(The trip was sponsored by Ericsson)