CHINA / National
China to be third largest economy
(AP)
Updated: 2007-07-11 22:35
China’s sizzling economy grew even faster in 2006 than previously
reported, the government said Wednesday, moving it closer to overtaking
Germany as the world’s third-largest and possibly adding to fears of
overheating.
In this file photo a shop assistant checks hundred yuan bank notes at a
shop in Xiangfan, central China’s Hubei province, August 19, 2006.
China’s foreign exchange reserves, the world’s largest, swelled to $1.33
trillion by the end of the first half on the back of massive trade flows
that contributed to an acceleration in money supply growth in June.
[Reuters]
The National Bureau of Statistics raised its estimate of China’s 2006
growth rate from 10.7 percent to 11.1 percent. It nudged up its estimate
of total output by 146.4 billion yuan ($18.8 billion) to 21.1 trillion
yuan ($2.705 trillion).
The revision brought China closer to Germany, the world’s third-largest
economy after the United States and Japan. Germany’s 2006 output was $3
trillion but its 2.5 percent growth rate was well below China’s.
The statistics agency routinely issues such revisions to economic growth
rates. But the latest report could receive special attention from Chinese
leaders, who are trying to rein in a boom that they worry could ignite a
financial crisis.
Chinese leaders want to maintain fast growth to reduce poverty but are
trying to slow investment in auto manufacturing, real estate and other
areas where supply outstrips demand. They worry that runaway spending
could ignite inflation or leave banks and borrowers with dangerously high
debt levels.
In the most recent official forecast, the central bank’s research bureau
said last month the economy was expected to expand by 10.8 percent this
year. That was in line with projections by the World Bank and other
economists, and would be China’s fifth straight year of growth in excess
of 10 percent.
Wednesday’s revision was in line with the opinions of outside economists,
who said the earlier figure seemed too low, suggesting the economy was
slowing despite surging exports and other indicators.
The change comes amid reports of double-digit growth in industrial
output, investment and other economic indicators.
China’s trade surplus soared to a new monthly high of $26.9 billion in
June, the government reported Tuesday. That was despite official efforts
to narrow the ballooning trade gap by repealing rebates of value-added
taxes on exports.
The statistics bureau’s brief announcement on Wednesday said the biggest
increase in China’s estimated output was in secondary industries, which
includes manufacturing, construction and utilities.
The exact size of China’s economy is a matter of debate, with foreign
analysts saying the small statistics agency lacks the resources to
provide more than a general estimate.
In December 2005, Beijing raised the official size of the economy by
nearly 17 percent and retroactively boosted annual growth figures for the
previous decade following the first nationwide census of China’s booming
service industries such as restaurants.
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To be continued
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