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China economy growth 10.7% in 2006

China economy growth 10.7% in 2006

China's economy grew 10.7 percent in 2006, its fastest rate in more than a decade, as investment and exports powered ahead despite a raft of government curbs to keep the pace of expansion in check.
The world's fourth-largest economy has now grown at double-digit rates for four years in a row.
At that pace, China's output could leapfrog Germany's and catapult it into third place in the global rankings as soon as 2008, when it will showcase its meteoric rise by hosting the Olympic Games. It overtook Britain in 2005.
"The message is that the economy is booming and I'm forecasting that it will grow 10.7 percent again in 2007," said Tim Condon, head of Asian financial market research at ING in Singapore.
The 10.7 percent clip of gross domestic product growth was faster than the preliminary 10.5 percent estimate given earlier in the month by officials. It was up from 10.4 percent in 2005 and was the briskest rate since 10.9 percent in 1995.
Slightly slower
The National Bureau of Statistics, in a report released yesterday, said GDP between October and December rose 10.4 percent from a year earlier, slowing a bit from a 10.6 percent annual pace in the third quarter.
Economists traced the modest slowdown to the ripple effects of a spate of tightening measures in recent months.
Since April, the central bank has raised interest rates twice and increased four times the proportion of deposits that banks must hold in reserve instead of lending out.
The central government has also cracked down on wasteful investments, naming and shaming officials and provinces that failed to comply with orders to tighten up planning procedures and observe tougher environmental protection criteria.
The curbs succeeded in slowing down growth in investment in fixed assets such as flats and factories in urban areas to 24.5 percent in 2006 from 27.2 percent in 2005.
"Our investment structure has improved and investment in sectors experiencing overcapacity has been brought under control," statistics chief Xie Fuzhan told a news conference.
In December alone fixed-asset investment growth sank to 13.8 percent from a year earlier.
Economists dismissed the figure as unreliable but said Beijing would have to keep the economy on a fairly tight leash in 2007, especially as consumer price inflation rose to 2.8 percent in the 12 months to December from 1.9 percent in November.
Stephen Green with Standard Chartered Bank in Shanghai said the central bank could bring forward the next increase in interest rates and let the tightly controlled yuan rise faster.
"From our read of the economy, it would do no harm. We hear that bank lending in the first few weeks of the year has been really substantial," Green said in a note to clients.


Updated : 2020-12-05 13:40 GMT+08:00