China's Economic Boom Continues in Q2

21 July 2005

The Chinese economy sustained its breathless level of expansion during the first few months of the year [WAMN: 21-Apr-05] by maintaining its 9.5% growth rate between January and June, down just 0.2 percentage points from the same period last year.

With total GDP at yuan 6.7 trillion ($809 billion; €670bn; £466bn), the National Bureau of Statistics proclaimed that "the national economy continued to develop in the expected direction of macroregulaton and control", although it cautioned that "the total size of investment is too large".

Many analysts were surprised by the soaring growth rate, having predicted a dip in expansion to around 9%. Zhao Xiao of the State-Owned Assets Supervision and Administration believes China's strong exports to be behind the rise, but maintains the economy will "lose steam in the second half as exports and investments slow down".

China has attempted to rebalance its overheated economy by imposing lending restrictions and capital gains tax to cool growth in factories and property development. Investment in these areas nevertheless rose by over 25% in the first half of 2005.

Data sourced from Wall Street Journal Online; additional content by WARC staff