China faced the double challenge of an overheating housing market and depreciation of the yuan in 2016. To some extent, housing prices have been kept from dropping dramatically but the exchange rate of the Chinese currency has been its victim.

Therefore, it is highly important that in 2017 policymakers address the big risks posed by real estate-driven economic growth and take the necessary measures to ease the pressure for the yuan's depreciation.

People's Bank of China, China's central bank, introduced more liquidity to the market last year to ease the downward pressure on the economy. The total social and government financing was estimated to reach about 25 trillion yuan ($3.6 trillion) in 2016, 5 trillion yuan more than in 2015.