Economist: no signs of overheating

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.