In 2004 about 3.47 million units of passenger buses were produced and 3.46 million units were sold by domestic auto makers. That contrasted sharply with the boom in 2003. Things went better in the 4th quarter of last year but it still takes time before a turning point is there.

Potential buyers expect lowered import tariffs make imported cars cheaper, which will give them more choices. Domestic auto makers have felt the chill and introduced more new models to the market. Price wars spurred consumers' enthusiasm first and then hesitation for more price cuts. All of these have added uncertainties to the market.

China's export and absorption of foreign investment will face challenges this year. This opinion is held by Chen Dongqi, Vice Principal of the Academy of Macroeconomic Research the State development and Reform Commission.

Fueled by the robust growth of both developed economies such as US and Japan and emerging economies like China and India, the global economy enjoyed an expansion of more than 4 percent which was higher than the last peak in 2000. As this is regarded as the last climax in this round of 4-year business cycle, a 2 to 3 year slowdown is possible from this year. This makes unfavorable condition for China as the world's third largest trading nation and the largest destination of foreign direct investment.

Worries about competition from low priced Chinese products will give rise to more anti-dumping investigations against Chinese exporters. Chin has taken some measures to try to pacify foreign competitors. Tax rebates for some exports have been cancelled and duties are imposed on textile exports. Chinese manufacturers are urged to input more energy into R&D to offer more added value in their products.

The country will continue to place big orders for oil, minerals and other basic energy, as well as raw materials. There is also a swelling budget for aviation supplies. Boeing and Airbus won their largest contracts in China recently.

The mounting pressure on exports is one of the reasons that it is not the right time for China to revalue its currency. An expert who studies development strategies and regional economy at the Development Research Center of the State Council doubts whether the RMB is really undervalued if the nearly 5 trillion yuan of asset losses caused by bad assets and losses from issuance of treasury bonds are taken into account.

He also said that the international environment has also changed. US has realized the fact that a stronger yuan would not help its trade deficit with Asian-Pacific countries. As China is a large holder of US treasury bonds, it will keep less such bonds if RMB is appreciated. In this case, the market for US treasury bonds or the even the whole financial market will face the pressure of interest rate hike.

Chinese Vice Premier Huang Ju and Vice Governor of the People's Bank of China both denied the possibility of altering the exchange rates at the World Economic Forum a few days ago. And there are signs that hot money are withdrawing from China.

Foreign investors are still busy expanding their presence in China. But these days they are not happy about the voice of equal treatment between their Chinese competitors and them. Foreign funded enterprises are enjoying more favorable taxes. Experts and Chinese players are demanding a level playfield. They argue that it is the right time to do this and any delay will cause further losses to the whole economy. Speculation about the policy change is swirling around town. But the Xie Xuren, head of the nation's tax department, confirmed two days ago that they would accelerate the "studies" of a uniformed tax treatment.

Last year dozens of cities had dark days due to the sweeping power crunch around the country. At the end of last year a conference on the policy of a prick link between coal and power attracted much attention. It is reported that power plants are asked to share the spiraling coal costs.

The report of the Development Research Center of the State Council predicts a more than 10 percent climb of crude coal prices in 2005. Currently 90 percent of coal is consumed by the country's industry. And more than 75 percent of the amount was absorbed by power, metallurgy, construction materials, oil refinery and chemicals.

The report estimates that in 2005 the power sector would ask for another 120 million tons of coal while the metallurgy for another 30 million tons. The total of the new demand will stand at about 150 million tons.

China is drafting a law to encourage the use of renewable energy. Coal fueled power prices are much lower than that generated by wind or other renewable energy. This is expected to be changed by the law. Priority will be given to hydropower in the years to follow. The central government has observed the overinvestment on the power plants, especially the environmental damage that some power plants cause along the rivers. The latest case is that the Three Gorges Project Corporation may face punishment because of their failure of building power generators in compliance with rules for environmental influence assessment.