China economic growth up to 10.2%China raises 2005 economic growth figure to 10.2%
JOE MCDONALD
Wednesday, August 30, 2006
BEIJING — China's booming economy grew even faster last year than originally thought, the government said Wednesday, as authorities announced another new measure meant to rein in the growth they fear could create problems.
The Chinese economy grew by 10.2 per cent in 2005, higher than the previously estimated 9.9 per cent, the National Bureau of Statistics said. It cited higher-than-expected output in industries ranging from farming and manufacturing to services.
Such rapid growth in what already is the world's fourth-largest economy has alarmed Chinese leaders. They worry about a possible upsurge in inflation or financial problems and have raised interest rates twice this year to cool off a boom in construction and borrowing.
President Hu Jintao's government wants to keep overall growth fast to reduce poverty. But it worries about excessive investment in real estate, textiles, auto manufacturing and other industries and has targeted them with special restrictions.
The official growth target for this year is 8 per cent, but communist leaders appear to be willing to accept much higher rates so long as inflation stays low. The Statistics Bureau said consumer prices rose 1 per cent in July from a year ago.
The World Bank and other outside experts say growth this year could be as high as 10.4 per cent.
The newly revised 2005 figures raise output by about 70-billion yuan ($9.7-billion) to 18.3 trillion yuan, the Statistics Bureau said on its Web site.
The revision reflects the struggles of China's communist planners to keep up with rapid changes in an increasingly capitalist-style economy.
In December, the government increased the official size of China's economy over the past decade after carrying out the first nationwide survey of private businesses and finding higher-than-expected output from emerging service industries.
Also Wednesday, the government announced yet another measure aimed at cooling off the economy, raising the amount of foreign currency deposits that Chinese banks must hold in reserve, reducing the amount available for lending.
That follows an earlier move to raise reserve ratios for Chinese currency deposits.
Banks have to keep 4 per cent of their foreign currency on deposit with the central bank as of Sept. 15, up one percentage point from the previous requirement, the government said.
The impact should be modest because only a small fraction of China's bank accounts and loans are in foreign currency, the official Xinhua News Agency said, citing unidentified analysts.
The step is expected to remove nearly $1.8-billion from the economy, Xinhua said.
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