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China forecasts 9.3% economic growth for 2004

China's surging economy will grow by 9.3% this year, amid signs that efforts to tame the economic boom are failing to cap inflation.
PTI | By Associated Press, Shanghai
UPDATED ON DEC 28, 2004 06:27 PM IST

China's surging economy will grow by 9.3 per cent this year, the government forecast on Thursday, amid signs that efforts to tame the economic boom are failing to cap inflation.

China's gross domestic product for 2004 is forecast to increase to 13.4 trillion yuan ($1.6 trillion; euro 1.3 trillion), state media reported, citing the State Information Center.

Meanwhile, the National Statistics Bureau said that the producer price index, a leading indicator for consumer price movements, jumped 8.4 per cent on-year in October. The index, which measures the cost of goods used in production, rose 7.9 per cent on-year in September.

The bureau cited higher prices for crude oil, coal, steel and nonferrous metal prices as major factors behind the rise. China's consumer price index, the country's main indicator for inflation, rose 5.2 per cent in September, remaining near a seven-year high.

The figure for October has not yet been released. The government has sought to curb bank lending to property developers and ordered local governments to cut back on construction projects, hoping to rein surging investment that it says is fueling inflation and could cause a financial crisis.

Early this year, leaders set the country's official target for GDP growth at seven per cent. But that goal appears to have been quietly dropped.

Meanwhile, the Commerce Ministry reported that China recorded a trade surplus in October of $7.1 billion (euro 5.5 billion), the sixth straight month of surpluses.

However imports also grew faster than expected, underpinned by rapid economic expansion.

Imports in October totaled $45.43 billion (euro 35.3 billion), up 29.3 per cent from a year ago, while exports grew 28.5 per cent on-year to $52.53 billion (euro 40.8 billion), it said.

For the January-October period, China's trade surplus totaled $10.97 billion (euro 8.5 billion), a turnaround from a $6.8 billion (euro 5.3 billion) deficit in the first half, the government said.

China's trade surplus in 2003 was $25.4 billion (euro 19.7 billion).

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