Beijing (AsiaNews/Agencies) – China's economy grew at an annual pace of 11.5 per cent in the third quarter of the year compared to 11.9 per cent in the second, official figures show. This is the result of macro-economic controls by the government concerned that the economy might overheat and cause inflation, said Li Xiaochao, National Bureau of Statistics spokesman.
Five interest rate increases in 2007 have been among its efforts to curb the pace of growth. The others include raising banks’ mandatory monetary reserves, a ban on building luxury villas and an upping of taxes on steel exports and other energy-intensive products.
Inflation remains however a persistent concern. Despite the fact that many prices are still controlled, including energy, transport and utilities, inflation stood at 6.2 per cent in September, affecting in particular the cost of food—something that is critical for hundreds of millions of Chinese who are still poor and living far from middle class standards.
In an address to the State Council yesterday Premier Wen Jiabao reiterated the need to check prices and continue to curb rapid increases in fixed-asset investments, bank loans and land use and “strictly control” new projects, especially those that are energy-intensive and highly polluting or in sectors showing overcapacity.
Price controls will remain in place despite higher costs of energy and raw materials. Beijing wants to build a strategic metals reserve to protect production against price jumps.
Wen also urged the government to “implement comprehensive control policies for the property sector, push ahead with cheap rental housing construction and try to curb excessive increase in property prices.”
Fixed-asset investments remain high, expanding by 25.7 per cent in the first nine months of this year from the same period a year earlier, mostly spending by state-controlled enterprises on plant and equipment.
Legendary US investor Jim Rogers announced that he was shifting all his assets out of the US dollar and buying yuan because the Federal Reserve had eroded the value of the US currency.
“The US dollar is and has been the world's reserve currency,” he said. “That's changing. The pound sterling, which used to be the world's reserve currency, lost 80 per cent of its value as it went through the whole period of losing its status as the world's reserve currency.”
China will be “the most important country in the 21st century,” he added.