Growth high despite tightening
(Reuters)
Updated: 2006-06-25 11:24 China's economy will grow at least 10 percent in the second quarter and in
2006 as a whole despite measures to cool down its booming economy, Chinese
central bank governor Zhou Xiaochuan said on Saturday. Speaking to reporters on
the sidelines of the annual meeting of central bankers at the Bank for
International Settlements in Basel, Zhou said: "I think probably for the entire
year it's also something around 10 percent."
He said second-quarter growth would also be "probably quite high" at above 10
percent.
Despite measures to curb growth, recent data has suggested that China's
economy is steaming ahead, with investment in factories and other fixed assets
in the first five months of 2006 jumping 30.3 percent from a year before.
In the first quarter of 2005, China's economy expanded by 10.3 percent.
China surprised financial markets in April by raising interest rates for the
first time in 18 months. It hiked its benchmark one-year lending rate to 5.85
percent from 5.58 percent.
The central bank also raised the amount of cash that banks have to hold in
reserve by 0.5 percentage points earlier this month to rein in frenzied lending
and excessive investment.
"The direction is to gradually tighten up," Zhou said.
However, Zhou said China did want to risk an economic
slowdown.
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