When the Asian financial crisis spread from Thailand to Singapore to Malaysia to Korea, many economists speculated that China would next be on the list, especially considering the state of the Chinese banking system. The increase in the country's rate of growth suggest that China's chief economic planner, Prime Minister Zhu Rongji, has managed to avoid the malady that plagued the rest of Southeast Asia. The increase in China's GDP should not suggest that the country is not beset with economic problems.
Most economic activity is concentrated in a handful of coastal cities.
Other regions are suffering from a recession and it has been suggested that further declines in economic activity in the industrial northeast could lead to protests. The unemployment rate in this region is over 30 percent in some places. China has tried to improve economic conditions in this area by spending on huge public works projects. It has also increased government workers' salaries, increased vacation time and cut bank-deposit rates in an effort to encourage consumer spending. Price controls have been imposed to curb deflationary pressures.