Beijing continues its struggle to limit China's economic growth, setting a growth rate of eight percent for 2007 as its goal, despite the 10.5 percent seen in 2006.
Official economic newspaper China Securities Journal explained that rapid expansion in investment has been driving growth in the PRC, the world's fourth largest economy. China's GDP is expected to reach more than 20 trillion renminbi (1.939 trillion euros) in 2006, according to Ma Kai, minister from the National Commission for Reform and Development, the governmental department responsible for economic planning.
Investment in fixed urban assets rose 26.6 percent in the first 11 months of 2006, Ma said, adding that there's a strong likelihood of even higher investment.
He went on to say that, "we have to slow the unstoppable investment", while criticizing some local governments for encouraging the expansion of investment in fixed assets, like construction and in real estate speculation.
At the Central Congress for Economic Policies, held recently to lay out guidelines for 2007's macro-economic policies, President, Hu Jintao and the Prime Minister, Wen Jiabao promised to reinforce efforts to increase imports and foreign investment while keeping exports at the same level.
Beijing's concerns about export-based Chinese rapid growth, center on rising inflation and excessive debt levels among banks and companies. The authorities are also worried about excessive investment in the civil construction sector, as well as in the automotive production and textile sectors.
The Chinese central bank has adopted a number of macroeconomic control measures to cool down the economy, raising the interest rate twice in 2006 in an attempt to restrain the real estate sector and the upsurge in bank loans.
China benefited from a trade surplus of US$133.62 billion in the first 10 months of the year, and from a US$101.9 billion surplus in 2005.