China: predictions for 2010 中国2010年风云叵测

www.kaichenblog.blogspot.com

(The Telegraph, UK)

China: predictions for 2010 中国2010年风云叵测

After a year in which China gained international standing for leading the world out of recession, 2010 will prove a tricky 12 months at home as Beijing’s policy makers tackle the unwanted consequences of their massive economic stimulus measures.

By Peter Foster, in Beijing
Published: 12:10PM GMT 23 Dec 2009

Inflation, rising food prices, graduate unemployment and a property bubble are all mounting concerns.

Abroad, increasing demands for China to take a more responsible role on the world stage lead to some delicate decisions over how to deal with Iran and North Korea.

Trade frictions deepen between China and the US and EU.

But on the snooker tables of the Crucible Theatre in Sheffield, China’s Ding Junhui racks up a famous sporting victory.

Economy

2010 opens with another massive loan splurge as Chinese banks get lending before Beijing - as widely predicted - starts to tighten the loose fiscal and monetary policy in the third quarter. Property and stock bubbles continue to inflate.

Rising inflation puts pressure on Beijing to abandon its de facto dollar peg for the renminbi and allow its currency to appreciate in the second half of the year. However, the gain of 3-4 per cent against the dollar is not enough to prevent a record number of trade spats with the US and EU.

Iran

Despite growing pressure from the US, China refuses to back tough sanctions against Iran, one of its largest oil and gas suppliers and key strategic partner in the Middle East. Moscow softens its line, but Beijing is unmoved. The US and its allies are forced to choose between watered-down sanctions and no sanctions at all.

Expo

The 2010 World Expo, dubbed China “economic Olympics”, opens in Shanghai. China’s massive pavilion is widely admired. Britain’s effort – a giant cube bristling with fibre-optic rods - isn’t bad either. The wider world – much to China’s chagrin, having spent more than £30 billion on the project – doesn’t really notice.

North Korea

After much diplomatic shuttling, hopes that North Korea will return to the six party talks on nuclear disarmament come to naught. It’s clear that Pyongyang is not serious about giving up its nukes and the US is not interested in more unproductive negotiations. China, having played its part, is quietly relieved to be spared the loss of face that would come from the talks’ inevitable collapse.

Sport

Chinese snooker star Ding Junhui capitalises on a rich vein of form to win his first World Snooker Championships title at the Crucible in April. His victory is a breakthrough for the popularity of the game in China and the launch-pad for a succession of Chinese champions in the coming decade.

Taiwan

China and Taiwan sign a free trade agreement despite Taiwan’s pro-China president Ma Ying-jeou facing mounting opposition at home. China’s fears that Ma will lose office in the 2012 presidential elections to a pro-independence candidate help expedite the deal.

Meanwhile Barack Obama signs off on a raft of arms sales to Taiwan – but not the coveted F16 fighter jets. Beijing issues a furious denunciation of the decision and suspends military-to-military ties - but only for a few months.