China's economy continues to surge, growing more than 11 percent in the first three-quarters of this year even as the government continues to search for ways to slow it down. Daniel Schearf reports from Beijing.
China's juggernaut economy has grown by 11.5 percent so far this year, defying government efforts to slow the rapid expansion. The continued growth has put China on track to surpass Germany as the world's third largest economy, by as early as December.
Growth was fueled by foreign trade that rose by 23 percent, and investment in fixed assets, such as factories and roads, which were up by nearly 26 percent.
The government has instituted numerous changes in an attempt to rein in the economy, including tightening credit and allowing a slow rise in the value of the currency. But growth continues to remain in the 11 percent range, extremely high by world standards.
Nevertheless, a spokesman for the National Bureau of Statistics, Li Xiaochao, maintained Thursday that the government's efforts had brought the economy under control.situation, from an economy that is overheating, to one of "speedy growth."
Consumer prices - a key inflation indicator - were up by six-point-two percent in September. Overall inflation for the first three-quarters was four-point-one percent - significantly above the government's target of three percent.
Food prices have increased by more than 10 percent so far this year, with meat and poultry up by 29 percent - a warning signal that inflation could get out of control. The public is already complaining about a large increase in the price of pork, a basic part of the Chinese diet.
On a brighter note, Li says incomes have risen more than 13 percent in the cities and 14 percent in the countryside, and companies are more profitable. But he acknowledged that the economy still faces serious challenges.
He says institutional, systematic, and structural problems in economic performance continue, including rapid economic growth, price rises, high pressure on energy consumption, the need to reduce pollution, and the uncertainty of the world economy.
Chinese officials have tried and failed to tighten the money supply to prevent overheating and speculative investment. They say they want to reduce the risk of borrowers defaulting on loans, by curbing credit and restricting land use.
However, even though interest rates have been raised five times this year and bank reserve requirements eight times, government figures showed cash in circulation was up by 13 percent, and outstanding loans increased 19 percent.
China's politically sensitive trade surplus was also up by $75 billion for the period, to $185 billion. This will likely lead to more international pressure on China to further revalue its currency, the yuan.
The country's foreign currency reserves, already the largest in the world, rose by 45 percent to more than $1.4 trillion.