Facing rising inflationary pressure and a likely recession in the United States, Beijing will have a tough task in balancing its economic growth this year, which analysts expect to slow but remain robust.
After a string of tightening measures, Beijing appears to have kept the economy from overheating as growth slowed in the fourth quarter, especially in fixed assets investment.
On the other hand, retail sales rose faster than expected, giving confidence to analysts that domestic consumption would support a solid economic growth this year following the 11.4 per cent growth last year.
Sumei Tang, an analyst at Moody's Economy.com, a research unit of the credit rating agency, expects about 9.5 per cent growth this year while JPMorgan Securities' Frank Gong estimates 10.5 per cent.
But despite the growth forecasts, some economists worry about Beijing's ability to tackle the impact of a slowdown in exports demand from the US and rising inflation.
HSBC economist Qu Hongbin said: 'A US recession could erode export growth to below 10 per cent, [which will hurt] manufacturing profits, investment and jobs, and cause excess capacity, rising non-performing loans and the bursting of asset bubbles.'
