CPI inflation should average 2%; disinflationary pressure is set to build over the next six monthsWe forecast one more interest rate cut in Ql; weakening employment is weighing onconsumption
7. New industries are emerging,preparing China for the long run.Investments in green energy, healthcare, education, environmentalprotection and infrastructure haverisen in 2014 (Figure 10). Theseindustries have been selectedby Beijing as part of its plan totransform China into a moreinnovative, environmentally friendlyand consumption-driven economy.For now, they are not yet bigenough to generate much e:onomicgrowth, as they account for lessthan 15% of GDP.The housing andmanufacturing industries remainthe heavyweights, but investmentgrowth in these sectors has beenslowing.
(Author: Economists fromStandard Chartered Bank)