China’s economy continues to sprint ahead; the latest figures show that it grew by 11.9% in the second quarter compared with the same period a year ago. That has increased speculation that the Beijing government will raise interest rates again to cool growth. China is now set to overtake Germany as the world’s third biggest economy – perhaps as soon as this year.
The country’s growth has been close to, or above, double-digits since 2004 and the figures for the period from April to June show a sharp increase over the 11.1 growth reported for the first quarter.
Li Xiaochao, spokesman for China’s National Statistics Bureau, said: “There are still systemic and structural problems, in particular, the international trade imbalance, high food price increases, high energy consumption plus pollution problems.” And he promised efforts to “adjust the structure, change the pattern of economic growth and deepen reform.” Analysts said that signalled an imminent increase in interest rates or in the amount of money that banks have to keep in reserve which means it is not available to be lent out.
Also in the second quarter, annual inflation hit 4.4%, the highest rate in more than two years. Much of that was from a big jump in food prices which has added to the dangers of the economy overheating.