New Delhi, Jan.24 : 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. Xie Fuzhan, the head of the National Bureau of Statistics, told reporters in Beijing today that the country's Gross Domestic Product (GDP) grew 11.4 percent last year from 2006, to 24.66 trillion yuan (3.42 trillion dollars).
According to him, that marked a fifth year of double-digit growth for the world's fourth largest economy after the US, Japan and Germany.
According to the China Daily, 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.
The sharp increase in output brought China closer to overtaking Germany as the world's third-largest economy after the United States and Japan.
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 percent, 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. "The central bank is now very aggressive in tightening, but within three months' time, four months' time, we expect much more relaxed policies from the government," said UBS economist Jonathan Anderson, according to earlier reports.
Professor Zhou Chunsheng of the Cheung Kong Graduate School of Business agreed.
"Given domestic and global factors, I think China will go ahead with tightening moves only in the first half [of 2008]. In the second half, I expect the tightening policies will be relaxed or even totally given up," he said.