China Says Its Economy

In: Social Issues

Submitted By mhuang
Words 853
Pages 4
In the last 30 years, no major economy in the world has grown at the speed of China’s, and no other country has been able to do it year after year, for over a decade.

And on Thursday China did it again, saying that its economy grew by a whopping 10.7 percent in 2006, the fastest pace in more than a decade, with only modest signs of inflation.

“This is pretty impressive,” said Shen Minggao, an economist in Beijing for Citigroup. “I’d say 2006 was about the best year in a decade — fast growth and low inflation.”

The 10.7 percent growth recorded in 2006 was the fourth consecutive year of double-digit economic growth and China’s strongest year since 1995, when the economy grew 10.9 percent.

The economic miracle — fueled by soaring exports and huge investments in buildings, roads and cities — goes on even in the face of frequent warnings from government officials and private specialists about asset bubbles, excessive bank lending and an overheating economy.

“Right now, the economy is growing at the upper limits of what is acceptable,” said Li Lianfa, an economist at Peking University. “The government is facing a lot of challenges.”

Chief among them are balancing the supersize growth and heavy investment, and trying to distribute the riches as evenly as possible.

Analysts say the government is determined to keep the economy revving, but is also wants to prevent anything from spoiling the party before 2008, when Beijing is to play host to the Olympic Games.

To help cool the economy, Beijing has raised interest rates and pressured banks to temper lending, with some results. Fixed-asset investment slowed in the latter part of last year, for instance, and economic growth in the last months of 2006 slowed from a feverish second-quarter pace of 11.5 percent.

Many economists are now forecasting that Beijing will take additional steps, possibly raising…...

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