Fri, Oct 26, 2007 - Page 11 News List

Chinese economy grows 11.5% in 3Q despite controls

AFP , BEIJING

China's economy expanded at a blistering pace in the third quarter, the government said yesterday, even as it declared that the immediate overheating risk had receded thanks to a series of control measures.

The world's fourth-largest economy grew by 11.5 percent in the third quarter and the first nine months of the year, compared with the same periods a year earlier, the National Bureau of Statistics said.

"We have prevented the economy shifting from speedy growth to overheating," bureau spokesman Li Xiaochao (李曉超) told a briefing. "Bottleneck problems have been eased."

As evidence of a slight slowdown, Li said that economic growth in the second quarter had been 11.9 percent, while inflation last month was 6.2 percent, down from 6.5 percent in August.

However, concerns lingered about possible policy responses to the growth data, with Shanghai stock prices closing the day 4.8 percent lower as investors worried about monetary tightening.

"Despite the modest moderation in activity growth and inflation, they remain above the comfort zone for policymakers," Goldman Sachs economist Hong Liang (梁紅) said in a research note. "We expect the central bank to continue to depend on credit rationing as its main policy tool."

Investment spending remained the major driver of economic growth, accounting for more than 40 percent of the increase in GDP in the first nine months, Li said.

The bureau confirmed that fixed-asset investments expanded 25.7 percent in the first nine months of the year from the same period last year.

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