China From “Prudent” to “Tightening” Stance on Monetary Policy

Sources: China Shifts to Tighter Policy

China announced this week that it will tighten its monetary policy, which analysts say indicate their concern about their economy’s growth rates. Beijing officials announced that they worry about the increasing rate of investment, which is the main factor in the acceleration of the economy. They are concerned that inflation in the food sector will soon spread into other sectors. China’s economy has grown by almost 12% already this year. A poll of investment bank economists revealed that they expect China’s economy to grow by more than ten percent again in 2008.

Question:

What are some of the social effects that are likely to result if China is unable to stabilize its growth?