GDP growth for 2006 revised upward

The Chinese economy grew 11.1% in 2006, the National Bureau of Statistics (NBS) said on Wednesday, upgrading from its earlier estimate of 10.7%. The additional US$146.4 billion in output takes China's GDP to US$2.7 trillion as it closes in on Germany, currently the world's third-largest economy, AP reported. Germany's 2006 output was US$3 trillion but it is only growing at 2.5%. The growth adjustment is a routine move for the NBS but it may be cause for concern among the Beijing leadership. China is balancing its desire to maintain fast growth as a means of reducing poverty with a need to curb investment in areas where supply exceeds demand, such as auto manufacturing and real estate. The fear is that excessive spending could trigger a spike in inflation or create a financial crisis as firms fail to meet their profit targets and are unable to repay bank loans. The central bank's research bureau estimated last month that 2007 GDP growth would be 10.8%.