The fact that investment in regional economies has been weak as political, economic, and social structural reform is carried out seems to be another reason for the slowdown. Under this situation, the Chinese authorities have been providing a series of economic stimulus measures both on the fiscal and monetary fronts.
Such a change, when it occurs under pressure, can result in considerable instability which is likely to be spread over a fairly long period. At the end of this process, the country then has no option but to revert to a more flexible exchange rate system.