China are beginning to feel the effects of the European recession and have lowered their growth target for 2012 from 8% to 7.5%. The manufacturing sector has slowed down with exports growing by only 7% in Q4 compared to 15% in the previous year. The Chinese property market is also showing signs of stagnation. This represents the lowest rate of growth for 20 years but may well allow China to balance its economy and tackle inflation.  The Chinese will aim to maintain interest rates and the government can continue to provide a steady flow of credit to small businesses. Reports in the US also suggest that Chinese imports are no longer as competitively priced as they used to.