01/20/2011, 00.00
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Inflation fears as Chinese economy grows

Growth of 10.3% in 2010, The last quarter was 9.8, higher than expected 9.6. Inflation remains high, at 4.6. Curbing the growth of prices is the government's priority. Halt on bank loans and rising interest rates so far do not seem to have produced the desired effects.

Beijing (AsiaNews / Agencies) - China’s gross domestic product (GDP) of grew by 10.3% in 2010, beating all forecasts. In the last quarter of last year growth was 9.8, compared to an estimated 9.6.

But inflation also remains high. In December, it was at 4.6%, with an increase in food prices of up to 50%. For some, the increase in consumer prices is due to the forthcoming celebration of the Chinese New Year, but according to industry analysts, the Beijing leadership has made curbing inflation its top priority, to avoid a spreading of discontent and revolt.

Inflation is also due to the large volume of capital that the state has injected into the market during the recent economic crisis. To curb inflation, in the space of a year Beijing has increased the reserves that banks must hold 7 times, holding back on loans, and twice increased interest rates.

But the big amounts injected into the market continue to have an ungovernable effect. In 2010 investment in construction rose by 23.8%, and the sale of land increased by 70% with property prices growing by 6.4%.

According to many economists, China's growth in 2011 will top at 9.3% and inflation will remain around 4.3.

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