I READ with interest the report, "China turns in 8.9 per cent Q3 growth" (my paper, Oct 23).

According to economic data from China's National Bureau of Statistics China achieved 7.9 per cent growth in its gross domestic product in the second quarter and is on course to meet its target of 8 per cent growth for the year.

However, according to the experts, in the long run, China cannot depend solely upon its government's hundreds of billions in economic stimulus packages to boost domestic consumption and demand, it has to widen its avenues for growth.

The flood of stimulus cash and unrestrained bank lending could generate risks for China.

There is the possibility of inflation, should demand exceed supply.

Another possible risk is a bursting property bubble, as more people are flocking to buy property.

Also, excess bank lending could lead to bad debt should the property bubble burst.

The likely consequences could be similar to what happened to the United States prior to last year's financial
crisis.

Should this happen, it would slow down the global economic recovery.

It would affect the region, and Singapore, with its export-driven economy, would be badly hit too.

In the last two decades, Singapore has made huge investments in China and both countries are also involved in joint economic projects.

Singapore's solid trade links with China mean that any issues with its economy would have an impact on the Republic.

Mr Teo Kueh Liang

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