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Chinese Economy Posts Growth of 9.9% in 2005

January 25, 2006|From Associated Press

SHANGHAI — China's economy grew 9.9% in 2005, the government said Wednesday. The expansion slightly exceeded unofficial estimates.

The full-year growth matched fourth-quarter growth of 9.9% from a year earlier. The country's gross domestic product in full-year 2005 was 18.23 trillion yuan ($2.26 trillion), the National Bureau of Statistics said in a statement.

Strong export growth and foreign investment helped to underpin that robust expansion, despite efforts by the communist leadership to curb excessive investments in construction and redundant factories that have strained transportation networks and supplies of energy and other resources.

What many economists forecast as China's "soft landing" was barely a landing at all, although it was a slight decline from the 10.1% economic growth rate seen in 2004.

China recently revised that figure upward from 9.5% based on an economic census that uncovered much larger-than-expected growth in the services sector.

The Statistics Bureau said GDP growth in the first three quarters of 2005 had also been revised upward from preliminary estimates.

Investments in construction and factories grew 25.7% to 8.9 trillion yuan ($1.1 trillion), and officials warned of problems in keeping excess spending under control.

The consumer price index, China's main gauge of inflation, rose a mere 1.8%.

Surging costs for raw materials and fuel were countered by falling prices for many industrial goods, reflecting overcapacity in key sectors such as vehicles and steel.

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