China's economy grew a torrid 9.1 percent last year and prices accelerated, Chinese officials said on Tuesday, but they denied that the country's economy was overheating.
The National Bureau of Statistics said that economic output jumped 9.9 percent in the fourth quarter from a year earlier. Joan Zheng, an economist at JP Morgan Chase, noted that the Chinese agency appeared to have revised upward its figures for year-to-year growth in the first and third quarters as well, to 9.9 percent and 9.6 percent.
The statistics bureau's own historical data, released on Tuesday, showed that last year's growth was the fastest since 1996, when it was 9.7 percent, and exceeded 1997, when it was 8.8 percent.
Li Deshui, the director of the statistics agency, said at a news conference in Beijing that last year's growth was the fastest since 1997, and predicted that the economy would grow more than 7 percent this year.
Li calculated that China had become a large consumer of raw materials, taking in 30 percent of the world's coal production last year, 36 percent of the world's steel and 55 percent of the world's cement, and acknowledged that prices for steel and cement were on the rise.
But he said that worries about an overheating economy were unjustified, particularly after the State Council, which is roughly comparable to the Cabinet in a Western country, ordered restrictions on further investment in some of the fastest-growing industries.
"From all these aspects, it is reasonable that people worry about the occurrence of overheating," he said. "However, everyone can see that the central government, the State Council, have already implemented a series of measures."
It is not clear, however, whether provincial governments are following the new rules in order to prevent the economy from growing at an unsustainable pace.
"Although seeing last year's condition," Li said, "we still cannot think the overall economy is overheated."
Consumer prices were 3.2 percent higher last year than a year earlier, according to figures released on Tuesday by the statistics bureau. Year-over-year price increases were steadily higher in the fall, up 3 percent in November, 1.8 percent in October and 1.1 percent in September.
"There was no severe inflation in China," Li said.
One big user of steel in China, along with construction, is the auto industry. Denton Dance, the senior manager of Asia and Pacific forecasting for JD Power, predicted in Hong Kong on Tuesday that sales of new cars and light trucks in China would rise 36 percent this year after having soared 86 percent last year.
"We've had phenomenal growth over the last two or three years," he said. "We're getting to the volume stage where big increases are harder and harder to sustain."
China's auto production has surpassed that of South Korea. But many of the cars being assembled in China still use a large quantity of imported parts because the domestic parts industry produces poor-quality components and lacks economies of scale.
The official New China News Agency reported on Tuesday that imports of cars and parts rose 84 percent last year, to US$14.45 billion. Within that category, car imports rose 63 percent, to US$5.25 billion, or 125,129 vehicles.
Chinese exports remained much smaller, as the country ran large trade deficits in both categories.
Bloomberg News reported that Yao Jingyuan, the chief economist of the National Bureau of Statistics, speaking at the same press conference as Li, told reporters that there was "no chance of the yuan being revalued this year."
The comment did not appear in the official transcript of the press conference, however, and a spokeswoman for the bureau declined to confirm or deny it. In China, the central bank and the finance ministry determine currency policy.
Zheng, of JP Morgan Chase, said that China's strong growth in the fourth quarter would make the year-over-year comparisons of economic growth look good at least through the first three quarters of this year.
She predicted that the Chinese economy would expand at an annual rate of 9 percent for the year, and that inflation would peak at 5 percent by June, with price increases concentrated in food, energy and raw materials.
Many independent economists suspect that China smoothes its statistics, adjusting high numbers down and low numbers up, so as to show fewer booms and busts and fewer spikes in inflation, although Li denied this last autumn. For instance, Western economists put the Chinese economy's expansion at 11 to 13 percent in the fourth quarter, not the 9.9 percent the government claimed.
China releases only year-to-year comparative quarterly growth figures, and avoids specifying growth rates from quarter to quarter. The National Bureau of Statistics said on Tuesday that the Chinese economy had been 6.7 percent larger in the second quarter of last year than in the second quarter of 2002, but Zheng estimated from the official figures that the Chinese economy actually shrank 4.9 percent in the second quarter compared with the preceding quarter, mainly because of an outbreak of severe acute respiratory syndrome, or SARS.
Chinese inflation figures are even harder to understand, partly because China has not recently updated the weightings of products that a typical household buys.
The December figures released on Tuesday were expected a week ago, a delay that was not explained.
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