China’s booming economy rises 11.9%

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China’s economy expanded 11.9 percent in the second quarter according to figures released by the National Bureau of Statistics yesterday.

The gross domestic product hit RMB10.68 trillion (US$1.39 trillion) in the first six months of the year, growing 0.5 percentage points higher than a year ago.

China Daily reported that the “blistering” GDP is growing much faster than the year’s target of 8 percent, largely due to industrial and taxation policies that spurred economic growth. Economies elsewhere in the world grew faster than expected in 2007 as well bureau spokesman Li Xiaochao told the paper.

“We are keeping a close watch on what direction (China’s) accelerated economic growth is taking,” Li told a press conference. “But whether or not the economy is overheated is a complex issue that should be viewed from different angles.”

The consumer price index (CPI), a major gauge of inflation, went up to 4.4 percent in June – a 28-month high – and 3.2 percent in the first half. But the rise of core CPI, after deducting food and energy prices, rose only 0.9 percent in the first half, he said.

Price hikes of foodstuffs, mainly grain, meat and fowl and eggs, contributed significantly to the rise of CPI, said Li. Food makes up a third of the CPI basket.

Experts expect the country to maintain its growth rate for the full year, though the government will likely strengthen controls and try to adjust the economic structure to change the pattern of economic growth Li said.

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