UPM-Biofore-Magazine-2-2014-EN

Industry 30%

MOST IMPORTANT EMPLOYERS

Services 36%

Agriculture 34%

Concerns over incurring debt According toMalassu, the liberalisation of the banking and financial sector and the full convertibility of the yuan are major challenges to the growth of the national economy. So is China’s internal debt. As a result of its excellent export income, the country has managed to collect unprec- edented foreign exchange reserves, but local governments have incurred debts to fund huge infrastructure projects. As the economic situation in the building industry has deteriorated, the income local governments receive from selling building land has declined. Many inefficient state-owned enterprises also have heavy debts. The debt of households has also increased as a result of purchasing apartments, cars and consumer goods. The rapid growth of property prices in growth centres has long been one of the main concerns of the Chinese >>

tivity. China’s goal is to increase the production of higher added value products by investing in new technology and R&D. Industrial production also has its challenges. Improving resource efficiency and decreasing plant emissions have become top priorities. “Demographic change will also require increased effi- ciency in the future. An ageing population is as big a chal- lenge in China as it is in Europe,” Malassu points out. Other areas requiring investments include the construc- tion of more efficient power plants and better transmission networks. China will continue to be dependent on coal-fuelled energy in the future, but the country is also increasing its production capacity of nuclear, wind, solar and hydro power.

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