China’s economy grew at a blistering rate of 9.4 percent in the first three quarters of 2005 as investment surged and the country’s politically volatile trade surplus more than doubled, the government said Thursday.
However, the government report expressed concern about “oversized and irrational” investment in fixed assets, the relatively low level of farmers’ incomes and the nation’s bulging trade gap.
In an attempt to slow growth, Beijing wants to do more to curb investment in unneeded factories and shopping malls, said Zheng Jingping, spokesman for the National Bureau of Statistics.
The government also has no plans to let China’s currency, the yuan, rise sharply in the near future, he said.
Incomes in the countryside, an area where the government worries about simmering unrest over enduring poverty, rose 11.5 percent, but still were less than one-third of those in China’s booming cities, according to the figures released by the National Bureau of Statistics.
For the nine-month period, the average rural income was the equivalent of $303 per person, while average urban income rose 9.8 percent to $977, according to the report.
Top Chinese scholars have have expressed concern that the widening rich-poor gap could lead to social instability.
The nation’s total economic output in the January-September period reached 10.6 trillion yuan ($1.3 trillion), the bureau said.
The overall growth rate, which compares the nine-month period to the same period a year ago, was close to economists’ expectations of about 9.3 percent.
Total investment in fixed assets shot up 26.1 percent in the first nine months of the year to 5.7 trillion yuan ($700 billion), the statement said.
Exports jumped 31.3 percent to $546.4 billion and imports rose 16 percent to $478.1 billion, resulting in a trade surplus of $68.3 billion. That’s more than double the $32 billion reported for all of 2004.
The Commerce Ministry has warned that if the gap keeps widening, Beijing faces new trade disputes and international pressure to allow its currency to strengthen.
Exports have climbed despite China’s decision on July 21 to make its currency, the yuan, about 2 percent stronger against the U.S. dollar and drop its peg to the dollar in favor of a restricted float against a group of foreign currencies. A stronger currency tends to drag on a nation’s exports by making their prices higher in overseas markets.
But repeated currency adjustments any time soon are unlikely, Zheng said.
The Bush administration has recently toned down its pressure on China to revise its currency policy.
During his visit to China this past week, U.S. Treasury Secretary John Snow took a broader approach, urging China to adopt sweeping financial and market-opening reforms that would encourage foreign investment and consumer spending, all of which could help shrink the trade gap.
Zheng also said China hopes to limit the impact of rising international oil prices by relying more on coal and natural gas. Surging oil prices were lifting manufacturing costs, but so far the increases haven’t been passed on to consumers, he said.
“Supply (of manufactured goods) is still abundant,” he said.
Consumer prices rose 2 percent in the nine months, or 2.1 percentage points slower than the same period last year. China is trying to hold down inflation as it tries to encourage more domestic consumption, while also avoiding deflation.
“We should see the slowdown in price increases as positive,” Zheng said.
Industrial production rose 16.3 percent in the nine-month period to 5 trillion yuan ($620 billion), the government said.
Retail sales grew 13 percent in the January-to-September period — or 12.1 percent when inflation-adjusted — to 4.5 trillion yuan ($560 billion), faster than last year’s pace.