Chinese economy to encounter challenges next year

China's economy is likely to face challenges such as exchange rate and trade disagreements coupled with protection of China's foreign investment interests, reported experts. At the first half of 2012, recession in many developed economies will continue thus increasing friction between the US, Europe and China. Moreover, protection of the Chinese overseas investment will pose additional challenges to Chinese diplomatic relations, added Ding Yifan, deputy director of the Institute of World Development.