China's red hot economy surges on

Officials say overheating still a danger as data shows fastest growth in 13 years.

    China has registered double-digit growth
    for over a decade [GALLO/GETTY]

    The rapid growth comes despite a series of interest rate hikes and other measures aimed at slowing an investment boom that the government worries could soar out of control.

     

    Growth rates did slow slightly in the final quarter to December – dipping to 11.2 per cent from 11.5 per cent in the previous quarter – but that still remains uncomfortably high for the government.

     

    "The risk of the economy shifting from rapid growth to overheating still exists," the deputy director of the National Statistics Bureau, Xie Fuzhan, told reporters.

     

    Officials fear that overinvestment will fuel inflation which remains well above government targets, the latest figures indicate.

     

    According to Thursday's data, China's inflation rate for December eased slightly to 6.5 per cent, but remained near decade-high levels despite efforts to contain a rise in politically-sensitive food costs.

     

    Inflation

     

    That put total inflation for the year at 4.8 per cent, well above the government's stated target of 3 per cent.

     

    High inflation has led to soaring
    food prices [GALLO/GETTY]

    Inflation is of particular worry for China's leaders because of the possible political implications of rising food prices on the country's poor majority.

     

    Many Chinese consumers, particularly in poorer rural areas, complain that soaring prices of basic foods are making life increasingly hard.

     

    The government has tried to increase food supplies by giving pig farmers and others more aid, but so far with little effect.

     

    Last week, in an effort to step up the fight against inflation, the cabinet ordered food producers to get government permission before implementing any new price increases.

     

    Aside from food prices, the cost of housing has also been rising sharply, although those figures are not included in the government's consumer inflation rate.

     

    According to Thursday's figures, China's house prices rose by 10.5 per cent in December compared with a year earlier, the highest monthly rate on record.

     

    The spiralling cost of housing also has political implications, with the government ordering developers to build more small, inexpensive apartments – though that too seems to have had little effect so far.

    SOURCE: Agencies


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