GDP expands 11.4 percent, fastest in 13 years

China??s economy expanded at its fastest pace in 13 years in 2007 even after a slowdown in the fourth quarter, amid rising inflation, official figures showed on Thursday.

The country??s Gross Domestic Product (GDP) grew 11.4 percent last year from 2006, to 24.66 trillion yuan ($3.42 trillion), said Xie Fuzhan, head of the National Bureau of Statistics (NBS) at a press conference in Beijing.

That marked a fifth year of double-digit growth for the world’s fourth largest economy after the US, Japan and Germany. The increase was especially remarkable given the fact that the United States is experiencing a slowdown due to the sub-prime crisis and housing slump.

Coupled with China??s phenomenal growth was accelerating inflation which hit 4.8 percent for the whole year, far above the central bank’s target of three percent.

The monthly CPI for December dropped slightly from the previous month to 6.5%, but it was still at a fairly high level. The government has announced a series measures to bring down the consumer prices before the traditional Chinese holiday, the Spring Festival which begins on February 6.

GDP expansion slowed down to 11.2 percent in the October-December period, Xie said, thanks to the tightening measures by regulators. The People??s Bank of China (PBOC), the central bank, raised interest rates six times and hiked the bank reserve ratio 10 times in 2007, in addition to capping bank loans.

The PBOC will continue to rein in credit, as part of a "tight" monetary policy adopted by policymakers to keep the economy from overheating and to tame inflation.

As part of the monetary tightening, the PBOC last week ordered the commercial banks to set aside a record 15 percent of their deposits as reserves, up from 14.5 percent.

Source:China Daily