China’s GDP Accelerates at Fastest Pace in 13 Years

While the U.S. economy continues exhibiting signs of deceleration, based on the latest reports, the Chinese economy - now a powerful global presence - expanded “only” a little over 10% in the first quarter of fiscal ’08.

Business in China continues to remain extremely strong and instead of slowing down, their economy is accelerating. Well, to be fair they are actually booming and the latest economic figures prove it.

Final GDP numbers for fiscal ‘07 were revised up from 11.5% to 11.9%, recording the fastest pace in 13 years, while inflation was at 8.7 percent in February, the highest in nearly 12 years.

The country’s foreign-exchange reserves, the world’s largest, surged to $1.68 trillion at the end of March. The trade surplus pumped $41.4 billion into the financial system in the first quarter, a whopping 40% increase from a year earlier.

In the first three months of the year, foreign enterprises invested $27.4 billion in China, jumping 61.3 percent from the same period last year.

Meanwhile, the manufacturing sector saw its Purchasing Managers Index rise to 58.4 in March, extremely bullish on the economy, thus posting the highest level since April 2007.

Additionally, China’s retail sales jumped 20.2% in both January and February over the same two months last year, including a huge 33.8% increase in spending on automobiles.

An interesting fact: Over half a million new autos are hitting the streets in China every month!

The Chinese economy has been the fastest growing economy in the world for almost three decades now, expanding at a 10 percent clip per year in real terms. However, the sharp growth this year has triggered concerns of a surge in hot money inflows, which could come on the back of rises in the yuan and a widening spread between falling US interest rates and rising Chinese rates.

The nation’s central bank increased the rate six times last year.

Comments

[chinesepetti]

great factual report here, anyone intersted making some real money in China and read some real money making news in China I refer you to eastmoney.com or if you can not read english aastocks.com/eng/defau...
good luck and good night.

[AmesTiedeman]

China just can't seem to slow down. Very impressive. I guess they will soon have inflation however. They need to let their currency float. It is in their interest.

[kkin365]

to chinesepetti - thanks for the link. I took a look, and it is excellent and timely (having Wednesday's closing data before NY opens). Keep up the good work.

[J.D]

Everything is amazing in China and the Beijing Olympics are a giant shining beacon of hope for the world. Nobody worry about anything because the Communist Party of China has support of 100% of the people. Naysayers be gone, the only unbiased news is here: chinadaily.com.cn. Rest assured, the Propaganda Department of the Communist Party of China only cares about your best interests.

[chinesepetti]

what about FOX News? I thought it is an outsourcing news channel of the white house......foxnews.com

[rainman]

China did not have any new rate hike, which is not a fair thing to do to the people who is under the water of CPI 8.3%.

Interestingly the immediate reaction of the data to Shanghai index was a negative one last night.

[chinesepetti]

Enter your comment hereI like to advise every readers here; Mr Michael Petti worked in Bear Stern before, the information is on this website seekingalpha.com/autho...
Thank you Mr Petti for your disclosure! You are a great American

[lanaar2]

Monetary policy has little or no effect on a fixed exchange rate economy like China's. If the governement is to control inflation he will have to use budgetary policy to slow aggregate demand. For example, by hiking taxes... Controlling money supply won't work.

[chinesepetti]

Thank you for your interests and many suggestions ; but is it more logical to let the Chinese manage the Chinese economy? So far from the last 20 years its track record is not that bad; isn't it?

[chinesepetti]

I like to remind readers here; Mr Petti worked for Bear Stern and also he is working in a State Chinese Communist run school at the moment. Details please visit seekingalpha.com/autho...

China has many problems on its own; but it's very ironic the red communists do not mind Mr Petti (who is paid salary by the Chinese communist run school) being so critical of everything in China even the air he breathes every day.