China's GDP was up 11.5 percent in the first nine months from
the corresponding period last year, said the National Bureau of
Statistics (NBS) on Thursday.
GDP rose by 11.5 percent in the third quarter, decreasing from
11.9 percent in the second quarter but higher than 11.1 percent in
the first quarter.
The figure, far above the official growth target of eight
percent for the whole year, indicates China is on track to post
double-digit growth for the fifth year in a row in 2007.
Song Guoqing, a well-known economist with Peking University,
said export reduction led to the GDP slow-down.
?Chinese government adjusted its export rebate policy from
July, reducing or canceling the export rebates for products ranging
from clothes to toys.
"In fact, traders exported their goods as many as possible
before the rebate cut," Song said, "and that's why we see the GDP
growing by 11.9 percent in the second quarter and 11.5 percent in
the third quarter."
"Therefore, we still have to wait for the October statistics to
see the impacts of the curbing measures," Song said.
According to the NBS, the country's foreign trade jumped by 23.5
percent to 1.57 billion dollars, down 0.8 percentage points from a
year earlier.
Exports, the main driver of China's economy, grew by 27.1
percent to US$878.2 billion 0.6 percentage points higher, while
trade surplus reached US$185.7 billion, up US$75.8 billion over the
same period last year.
Although yuan is appreciating against the US dollar continuously
and broke the 7.5 mark against one dollar Wednesday, exports keep
rising as half of the good were exported by foreign-funded
enterprises, who use dollars in transaction settlement, according
to experts.
It leaves China few options but to curb investment, a major
factor for the GDP growth only next to foreign trade, said Zhuang
Jian, senior economist with Asian Development Bank Resident
Mission.
The central bank may continue to raise interest rate or the
deposit reserve ratio for commercial banks to increase investment
cost, he said.
People's Bank of China announced to raise the reserve
requirement ratio by half a percentage point to 13 percent for
commercial banks from October 25.
This is the eighth such move this year and only one month after
the seventh hike of half a percentage point on September 25.
Meanwhile, China may have one or two interest hikes by year end
to curb investment, predicted Song.
China, the fifth time in a year, raised the one-year deposit and
loan interest rates by 27 basis points to 3.87 percent and 7.29
percent respectively from September 15 in a bid to curb rising
inflation and tighten control over excessive liquidity.
According to the NBS, China's GDP reached 16.6 trillion yuan in
the first three quarters, with growth rate 0.7 percentage points
higher than the same period of 2006.
The primary sector reported 1.82 trillion, the secondary sector
8.35 trillion and the tertiary sector 6.44 trillion yuan in added
value in the first three quarters, with the secondary sector,
including manufacturing, mining and construction, growing at 13.5
percent, 0.2 percentage points up from the same period of 2006.
The primary sector posted a growth rate of 4.3 percent and the
tertiary sector, including transport, telecommunications, catering,
tourism, banking and insurance, recorded an increase of 11
percent.
The NBS also announced on Tuesday that China's consumer price
index, a key inflation indicator, rose by 4.1 percent in the first
nine months over the same period last year
The CPI eased slightly to 6.2 percent in September after surging
to an 11-year monthly high of 6.5 percent in August. Despite the
slight drop in September, the CPI for the first nine months still
climbed 0.2 percentage points from 3.9 percent for January to
August.
The annual CPI rise could be 4.5 percent, said Yi Gang,
assistant governor of the People's Bank of China, or the central
bank, at a seminar in Hong Kong on Wednesday. The central bank
would wait to see the CPI growth cool to match the deposit rate
before considering further rate hikes.
China's key one-year deposit rate stands at 3.87 percent. Many
people withdrew their bank deposits to speculate on stock markets
where prices could soar by nearly 10 percent within a trading
day.
Food prices jumped by 10.6 in the first nine months, said the
NBS.
Grain prices were up by 6.3 percent, meat and poultry 29.1
percent, eggs 26.2 percent, aquatic products 4.6 percent, and fresh
vegetables three percent, but fresh fruit prices were down 3.3
percent.
Retail prices of commodities rose by 3.2 percent in the first
nine months, the producer prices for manufactured goods were up 2.7
percent, and the purchaser prices for raw materials, fuel and power
rose 3.8 percent.
Zhu Zhixin, deputy director of the National Development and
Reform Commission (NDRC), said about 86 percent of the rise, or 3.5
percentage points, was generated by food price hikes. He predicted
the prices for farm produce, which triggered a drastic rise in the
CPI and sparked inflation concerns, would continue to maintain a
high level.
On the sidelines of the just concluded Communist Party of China
congress, Zhou Xiaochuan, president of the People's Bank of China,
put employment growth as a higher priority than inflation
prevention in macro-economic controls and the recalibration of
monetary policies.
He said the central bank would continue a prudent monetary
policy to facilitate more coordinated economic development and
support consumption expansion.
"The government may raise interest rates once or twice before
the end of the year to curb inflation," said Song Guoqing, a
researcher with Peking University.
Although the CPI slowed slightly in September, largely due to
lower pork prices, it was still unstable and the downward trend
could be temporary, he said.
(Xinhua News Agency October 25, 2007)
