China's leadership has announced that it will implement economic reforms in an effort to boost growth. Although resistance from vested interests is expected, it is hoped that the reforms succeed so that the world's No. 2 economic power can serve as a locomotive for global growth.
The Chinese economy saw relatively low growth in the first two quarters of 2013. Its gross domestic product grew 7.7 percent in the January-March period from a year earlier and 7.5 percent in the April-June period. These figures represent a decline in GDP growth for two consecutive quarters. Although the GDP growth in the January-June period was 7.6 percent, slightly topping the government's annual target of 7.5 percent, the GDP growth has been less than 8 percent for five consecutive quarters.
It has been reported that the percentage of bad loans is increasing in 12 of the 16 Chinese banks that are listed on stock exchanges. China also has the problem of "shadow banks," which are not registered with any regulatory body and conduct their activities outside of banking regulations.
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