Center

China's economy probably grows 10.4%

(Bloomberg)
Updated: 2007-04-17 15:46

Bulging Trade Surplus

"Growth momentum in the Chinese economy has picked up again," said Frank Gong, an economist at JPMorgan Chase & Co. inHong Kong. "The bulging trade surplus has in turn further boosted overall liquidity in the financial system, leaving in place the fuel for rapid growth, future inflation and asset bubbles."

Premier Wen Jiabao told lawmakers last month that China needs to boost consumption and limit environmental damage to sustain the expansion of the world's fastest-growing major economy. Growth is unstable, imbalanced, uncoordinated and unsustainable, the premier said.

China's economy has more than doubled in size since the end of 2000 and last year's 10.7 percent expansion was the biggest since 1995. Growth for each of the past four years was at least 10 percent.

The yuan, allowed to move 0.3 percent a day against the US dollar, has strengthened 7.1 percent against that currency since a decade-long peg was scrapped in July 2005.