China's economy is not showing the classic signs of overheating despite its rapid growth, according to Zhu Baoling, a senior economist with the State Information Center, the Hong Kong Standard reported. "Overheating is when the GDP growth rate exceeds its potential level and prices keep rising by over 5% [annually]," Zhu said. He argues that China's GDP growth, which came in at 11.1% in the first quarter, still trails its potential growth, which was 11.3% in 2006 compared to an actual growth rate of 10.7%. Meanwhile, consumer inflation slowed to 3% in April from 3.3% a month earlier, although, if food prices are discounted, the figure is just 1%. Zhu predicts 10.5% growth in 2007, saying China's widening international payments surplus will add pressure for the yuan to appreciate and make it harder for the authorities to soak up excess liquidity.
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved