China’s economy grew by 11.4% in 2007- that is the fastest pace in thirteen years. However, Xie Fuzhan, the head of the Beijing government’s Statistics Bureau said he expects there to be a mild slowdown in economic growth this year as global demand weakens which will have an effect on China’s exports. In addition credit curbs put in place to cap inflation will take effect.
Xie Fuzhan said average growth over the last five years has been 10.6% which he called “really extraordinary.” According to a World Bank estimate, China’s growth is likely to be 10.8% this year.
Investment in fixed assets, which covers everything from infrastructure to new equipment in factories, rose by nearly a quarter last year. The government is making efforts to cool the economy, including raising interest rates six times in 2007.
Beijing is also anxious about inflation and said more needs to be done. Year-average inflation hit an eleven year high last November of 6.9%, but slowed to 6.5% in December. The government has now temporarily frozen energy, transport and some food prices. In the past high prices have led to frequent social unrest.