... my argument and how has the government tried to overcome them? However, China had experienced high inflation and external deficits in the late 1980s which raised questions about the viability of Chinese government's ambitions to sustain strong growth. Growing inflation consequent upon economic expansion triggered political unrest in 1989, which itself raised doubts about the political feasibility of sustained gradual reform. "There was growing criticism about deteriorating trade-off between growth and stability through the 1980s, with given rate of growth being associated with higher inflation and external payments deficits later in the decade"(2). 1) Li, K.W (2001) The two decades of Chinese economic reform compared, World economy and China, Vol.2, pp.55-60 2) Garnaut, R (1990) "Recent Developments in the Chinese Economy", The Australian National University Trade and Development Seminar, August. After a quarter of a century of intermittent high growth with little inflation and more or less external balanced external current payments, the ...

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