BBC: China growth reaches 13-year high

http://news.bbc.co.uk/2/hi/asia-pacific/7206174.stm

Last Updated: Thursday, 24 January 2008, 07:35 GMT

China growth reaches 13-year high

The Chinese economy has expanded by 11.4% over the past year, reaching its fastest growth rate in 13 years, officials have announced.

Increased exports and a boom in the construction industry helped the rapid expansion during 2007.

But officials warned that overheating remained a danger, despite a slight slow-down in the fourth quarter.

Inflation is also a serious concern, with many Chinese people hit by recent dramatic increases in food prices.

'Still developing'

Announcing the figures, National Statistics Bureau chief Xie Fuzhan said Beijing was paying "close attention" to the US credit crisis.

He said Beijing would respond by making "timely and proper adjustments" in exchange and interest rate policy, but gave no details.

Speculation has been mounting among analysts over whether China has overtaken Germany to become the world's third-largest economy.

But Mr Xie played down the comparison, saying: "It's not really important to know whether China is the fourth-largest or the third-largest.

"Even if the total surpasses Germany, China is still a developing country - in particular, the per capita GDP of China is really low."

Price controls

The BBC's Quentin Sommerville, in Shanghai, says economic growth is not a problem in China, but keeping the ever-expanding economy under control is proving tricky.

It took six interest rate rises by the government last year to slow the expansion. The last quarter of 2007 saw growth ease to 11.2%.

But while other governments around the world are cutting interest rates, China will likely have to raise them again if it is to keep its economy growing at a sustainable level, our correspondent says.

Another headache for Beijing last year was inflation.

Despite its growing wealth, China still has a large number of poor people struggling with dramatic increases in the price of daily essentials such as pork, which jumped by 50%.

Inflation hit an 11-year year high in November. Thursday's figures show that it fell back in December, although at 6.5% it remains a worry.

The government has introduced a range of price controls recently aimed at bring the cost of ordinary goods, particularly food, under control.

Dramatic price rises have led to social unrest in the past and Beijing cannot afford for its millions of poor to go hungry.

http://news.bbc.co.uk/2/hi/business/7182497.stm

Last Updated: Friday, 11 January 2008, 06:59 GMT

China's trade surplus jumps 48%

China's trade surplus soared 48% in 2007 to a record high as its export-led economic boom continued, government figures have shown.

The gap between what China exports and imports expanded to $262.2bn (£134bn) last year.

The latest big annual rise in the surplus may increase pressure on China to allow the yuan to rise in value.

The US in particular accuses China of keeping the yuan undervalued to keep Chinese exports cheap.

   
The smaller December surplus is largely welcome, and it presents a modest argument for the Chinese government that their efforts to reduce the trade balance are beginning to work
Jun Ma, chief China economist at Deutsche Bank

China counters that it is moving towards allowing the yuan to trade more freely, but says it can only move slowly on the issue for fear of derailing its export-dominated economic growth.

The West has also called for China to move faster on opening up its domestic market to foreign investment.

Safety scares

The country's trade surplus with the US expanded 19% to $163bn last year, while its surplus with the European Union grew even faster, up 46% to $134.3bn.

Overall, Chinese exports grew 25.7% to $1.2 trillion in 2007, while the level of imports increased to $955.8bn.

The continuing surge in its exports came despite a number of product safety scares last year, over everything from children's toys to toothpaste and clothing items.

China's December's monthly trade surplus was $22.7bn, up 9.5% from a year earlier, but below October's $27bn record.

Beijing has introduced measures to cool exports because of continuing fears that its economy may be overheating. These policies have included export taxes on goods such as steel.

"The smaller December surplus is largely welcome, and it presents a modest argument for the Chinese government that their efforts to reduce the trade balance are beginning to work," said Jun Ma, chief China economist at Deutsche Bank in Hong Kong.