Economic Trend News
- Economy faces risk of overheating: official
Date: 5-Sep-2007 Sources: (Shenzhen Daily)
THE country's rapidly expanding economy risks boiling over although overall demand is not currently exceeding supply, a senior official said yesterday.
China's growth surged to an 11-year high of 11.9 percent in the second quarter on the back of blistering capital spending and exports.
'We have to keep a sober mind and see that the economic growth rate is indeed fairly fast. There is both a possibility and a risk of overheating although the economy is currently operating in a stable way,'Bi Jingquan, vice chairman of the National Development and Reform Commission (NDRC), told a news conference.
Consumer inflation in August might have quickened from the decade high rate of 5.6 percent in July, he said.
But Bi, who supervises prices and the macro-economy at the NDRC, dismissed concerns that the economy has already overheated.
'Whether an economy is overheating or not should be judged by whether overall supply and demand is in balance and should not just be linked with the growth rate of the economy,'he said.
He said China had some structural imbalances - for example, pork is in short supply - but the economy's growth potential is now bigger and there are no bottlenecks in oil, coal, electricity and transport capacity.
Inflation was generally under control, he said.
'There are no wide-ranging, continuous price rises due to demand seriously exceeding supply,'he said. 'Therefore, there is no serious inflation.'
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