China's Economy Grows 11 Percent in Quarter; Remains Vibrant Amid Worries About Global Slump.
China's economy grew by a blistering 11.2 percent in the fourth quarter, propelling annual growth to its fastest rate in 13 years, the government said Thursday, showing that China remains vibrant despite worries that a possible U.S. recession will drag on global growth.
Analysts say China -- closing in on Germany as the world's third-largest economy -- could help to drive world growth in the event of a U.S. slowdown, though they say it alone cannot fill the whole gap. China's growth slowed only slightly from the third quarter's 11.5 percent rate. For all of 2007, China grew by a stunning 11.4 percent, the biggest rise since 1994.
A government official warned that China still faces risks of overheating despite efforts to restrain borrowing and investment. Surging inflation eased slightly in December to 6.5 percent but was still near decade-high levels, thanks largely to soaring food prices, the National Bureau of Statistics reported.
"The risk of the economy shifting from rapid growth to overheating still exists," the director of the National Statistics Bureau, Xie Fuzhan, said at a news conference. The rapid growth has been driven by a boom in exports and investment and came despite repeated interest rate hikes and official curbs meant to slow spending on real estate and other assets that regulators worry could ingite a financial crisis.
Xie said Beijing is paying "close attention" to the U.S. credit crisis and a possible U.S. slowdown but did not directly answer a question about what its impact on China was expected to be. He said Beijing would respond by making "timely and proper adjustments" in exchange and interest rate policy but gave no details.
China's total 2007 output was 24.7 trillion yuan, according to Xie, or $3.4 trillion at current exchange rates. Germany has yet to report 2007 economic data, but its government has forecast 2.4 percent growth, which would raise its annual output to 2.4 trillion euros, or $3.5 trillion. That would make China's economy about 5 percent smaller than Germany's.
Xie said he did not know when China might overtake Germany in output and played down the comparison. He said it will depend on exchange rates, not just economic activity, and noted that China is still much poorer per person. "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," he said. "In particular, the per-capita GDP of China is really low."
The government has been struggling to contain an inflation surge that began in mid-2007 as food prices rose. Inflation in food costs hits China's poor majority especially hard, and Chinese leaders worry that this could lead to political tension and have imposed a slew of measures to curb increases.
Consumer prices in December rose 6.5 percent compared with the year-earlier period, down from 6.9 percent in November, the fastest rise in 11 years. For all of 2007, prices rose 4.8 percent, well above the official target of 3 percent, according to the bureau. "Consumer prices rose rapidly and housing costs went up by a large margin in 2007," Xie said.
The inflation surge has been confined mostly to food and is blamed on shortages of pork and grain, but Beijing worries that continued high price rises could start to push up costs in other parts of the economy.
The government has tried to increase food supplies by giving pig farmers and others more aid, but double-digit monthly increases have continued. Last week, the cabinet took its most drastic step yet, ordering food producers to get government permission for any new price increases. This week, the government extended the order to fertilizer prices in order to cushion the impact on farmers.
Housing costs also have been rising sharply -- up 10.5 percent in December compared with the year-earlier period -- though they are not included in the government's consumer inflation rate. The government has imposed lending curbs to discourage speculation and tried to cushion the impact on the poor by ordering developers to build more small, inexpensive apartments.
Elsewhere in the economy, industrial output jumped by 18.5 percent last year compared with 2006, a growth rate that was 1.9 percentage points faster than the previous year, according to Xie. Investment in factories and other urban assets rose by 24.8 percent compared with 2006, an increase of 0.9 percentage points from the previous year's growth rate, he said.
China's economy grew by a blistering 11.2 percent in the fourth quarter, propelling annual growth to its fastest rate in 13 years, the government said Thursday, showing that China remains vibrant despite worries that a possible U.S. recession will drag on global growth.
Analysts say China -- closing in on Germany as the world's third-largest economy -- could help to drive world growth in the event of a U.S. slowdown, though they say it alone cannot fill the whole gap. China's growth slowed only slightly from the third quarter's 11.5 percent rate. For all of 2007, China grew by a stunning 11.4 percent, the biggest rise since 1994.
A government official warned that China still faces risks of overheating despite efforts to restrain borrowing and investment. Surging inflation eased slightly in December to 6.5 percent but was still near decade-high levels, thanks largely to soaring food prices, the National Bureau of Statistics reported.
"The risk of the economy shifting from rapid growth to overheating still exists," the director of the National Statistics Bureau, Xie Fuzhan, said at a news conference. The rapid growth has been driven by a boom in exports and investment and came despite repeated interest rate hikes and official curbs meant to slow spending on real estate and other assets that regulators worry could ingite a financial crisis.
Xie said Beijing is paying "close attention" to the U.S. credit crisis and a possible U.S. slowdown but did not directly answer a question about what its impact on China was expected to be. He said Beijing would respond by making "timely and proper adjustments" in exchange and interest rate policy but gave no details.
China's total 2007 output was 24.7 trillion yuan, according to Xie, or $3.4 trillion at current exchange rates. Germany has yet to report 2007 economic data, but its government has forecast 2.4 percent growth, which would raise its annual output to 2.4 trillion euros, or $3.5 trillion. That would make China's economy about 5 percent smaller than Germany's.
Xie said he did not know when China might overtake Germany in output and played down the comparison. He said it will depend on exchange rates, not just economic activity, and noted that China is still much poorer per person. "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," he said. "In particular, the per-capita GDP of China is really low."
The government has been struggling to contain an inflation surge that began in mid-2007 as food prices rose. Inflation in food costs hits China's poor majority especially hard, and Chinese leaders worry that this could lead to political tension and have imposed a slew of measures to curb increases.
Consumer prices in December rose 6.5 percent compared with the year-earlier period, down from 6.9 percent in November, the fastest rise in 11 years. For all of 2007, prices rose 4.8 percent, well above the official target of 3 percent, according to the bureau. "Consumer prices rose rapidly and housing costs went up by a large margin in 2007," Xie said.
The inflation surge has been confined mostly to food and is blamed on shortages of pork and grain, but Beijing worries that continued high price rises could start to push up costs in other parts of the economy.
The government has tried to increase food supplies by giving pig farmers and others more aid, but double-digit monthly increases have continued. Last week, the cabinet took its most drastic step yet, ordering food producers to get government permission for any new price increases. This week, the government extended the order to fertilizer prices in order to cushion the impact on farmers.
Housing costs also have been rising sharply -- up 10.5 percent in December compared with the year-earlier period -- though they are not included in the government's consumer inflation rate. The government has imposed lending curbs to discourage speculation and tried to cushion the impact on the poor by ordering developers to build more small, inexpensive apartments.
Elsewhere in the economy, industrial output jumped by 18.5 percent last year compared with 2006, a growth rate that was 1.9 percentage points faster than the previous year, according to Xie. Investment in factories and other urban assets rose by 24.8 percent compared with 2006, an increase of 0.9 percentage points from the previous year's growth rate, he said.
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