As uncertainty about whether the global economy is heading into a double-dip recession resurfaces, worries about China's economic growth are also set to bubble over as investors brace for more volatility in the stock, currency, and bond markets in the weeks or months ahead.
Mainland leaders are facing an acute dilemma in steering the world's second-largest economy.
On one hand, Standard & Poor's decision to cut the United States' triple-A credit rating last week is the latest ominous sign of the dark cloud hanging over the troubled US and European economies, adding to further uncertainty over the strength of China's exports, one of the key engines of growth.
On the other hand, confronted with soaring inflation and a property bubble, mainland leaders have been taking aggressive measures to tighten bank lending and reduce government spending. But that has given rise to concerns that overly tight measures could result in a hard landing for the mainland economy, leading to social instability.
In the next few days, the central government is expected to publish the economic indicators for July, and it is anticipated these will show inflation continued to remain above 6 per cent despite easing somewhat from June.
This means the government will have no choice but to continue its tight monetary policy in the short term. But the renewed concerns over the risk of the global economy plunging into a recession also heighten the prospects of a hard landing.
As policymakers weigh the risks of both overtightening and insufficient tightening, one thing is clear: the mainland's economic growth rate will follow a downward trend in the coming years.