Can be summarized as thus: cooling growth in gross domestic product from competition between overheating prevention measures and increasing overseas sales.
Here are some figures:
1. Economic growth is increasing at a rate of 11.3% from a year earlier, down from 11.5% in the previous months. Further evidence shows that the economy will only grow at 10.5% by the end of this year.
2. Inflation is near its highest in 11 years, with a 6.5% rise in prices in December, close to the 11-year record of 6.9% in November. The government is freezing energy and food prices in line with the situation. Retail sales surged 17% in 2007 due to inflation.
3. Export growth in December at slowest pace since 2002, due to increasing export taxes and weaker US demand.
4. Overseas companies, such as Samsung Electronics Co., are further taking advantage of cheap labor in China, boosting overseas sales. Economists predict that a export-led slowdown will lead to an inventory buildup in China and reveal the increasing over-capacity.
5. Individual lenders are feeling pressure as interest rates are raised beyond their all-time, nine-year, high. The yuan gained 1.3% against the dollar in December, a record increase, but due to a weakening dollar, remains about 5% lower than the Euro.
6. Fixed asset investment rose at 25%+ from a year earlier, far outpacing 2006 increase. Newly appointed government officials, after last year's Communist Party Congress, are eager to kick off new investment projects.
7. Mainland is pushing forward direct investment projects and trade with Taiwan following the "one China" policy. Taiwanese merchants are interested in the less developed central and western regions of China. By November 2007, the mainland had no less than $45 billion of Taiwanese direct investment.
What do you think of China's growth prospects?
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