China expansion fastest in 13 years
(From Asia Times) China’s economy expanded 11.4% in 2007, the fastest expansion in 13 years, mainly powered by exports and investment, even as growth slowed down slightly in the fourth quarter, according to government data released on Thursday.
Gross domestic product (GDP) increased to 24.66 trillion yuan (US$3.41 trillion) last year, bringing the Middle Kingdom closer to overtaking Germany as the world’s third-largest economy after the United States and Japan.
The full-year growth, the highest since 1994, made 2007 the fifth consecutive year that GDP has expanded 10% or more, said Xie
Fuzhan, director of the National Bureau of Statistics (NBS), at a press conference in Beijing.
GDP growth slowed in the last quarter of 2007 to 11.2% from 11.5% in the previous three months and 11.9% in the second quarter. The economy grew 11.1% from a year earlier in the first quarter last year, suggesting that government macro-economic controls to cool the economy were taking effect, Xie said.
The government raised interest rates six times last year and increased the minimum reserve ratio of commercial banks as it sought to take the steam out of the economy.
Of the three power engines pulling forward China’s economy, exports and fixed-asset investment continued to outgrow domestic consumption in 2007, according to the NBS figures.
Exports grew 25.7% to $1.218 trillion in 2007, though the growth was 1.5 percentage points lower than that in the previous year, largely due to weaker US demand. Imports rose 20.8% to $955.8 billion, giving a 2007 trade surplus of $262.2 billion.
Actual foreign direct investment in 2007 rose 13.6% to $74.8 billion.
The trade surplus and inflow of foreign investment boosted China’s foreign reserves to $1.53 trillion by end of 2007, up 43.3% from a year ago.
A booming property market accelerated the growth in fixed-asset investment last year. Investment totaled 13.724 trillion yuan, up 24.8% on a year earlier and 0.9% faster growth than in 2006. Investment in property development last year increased 30.2% to 2.528 trillion yuan, NBS statistics released this week showed. Developers are benefiting from strong demand for housing, with the average housing price in 70 major Chinese cities rising 7.6% last year.
Total retail sales of consumer goods, China’s yardstick for measure domestic consumption, grew 16.8% to 8.921 trillion yuan, 3.1 percentage points higher than the rate of increase in the previous year.
