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China's Still Booming, but What About Inflation?

11.5% growth pushes prices worldwide

By Jim O'Neill,  Newser User

Posted Oct 25, 2007 8:37 PM CDT

(Newser) – China's economy is booming and inflation is in check, but for how long? Third quarter growth swelled the economy by 11.5%, putting China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%. Beijing says it will keep falling, but inflationary fears sent the Shanghai stock market down 4.8% today, the New York Times reports

Beijing has set price controls to offset high wages and prices, hoping to stop the economy from "transitioning from speedy growth to overheating," an official said. One economist calmed fears by equating high wages to high output, not inflation. But with interest rates at half of inflation and money supply swelling, some experts are waiting for the inflationary shoe to drop.

Chinese workers set up scaffoldings at a construction site in Beijing in 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%. But some experts are waiting for the inflationary shoe to drop. (AP Photo/Andy...
Chinese workers set up scaffoldings at a construction site in Beijing in 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam, and inflation dropped...   (Associated Press)
People look at watchmaker Omega's store Thursday Oct. 25, 2007, in Shanghai, China. China's supercharged economy grew by a stunning 11.5 percent in the third quarter, slowing slightly amid authorities' efforts to avert overheating but staying on track to overtake Germany as the world's third-largest economy within weeks, according...
People look at watchmaker Omega's store Thursday Oct. 25, 2007, in Shanghai, China. China's supercharged economy grew by a stunning 11.5 percent in the third quarter, slowing slightly amid authorities'...   (Associated Press)
A Chinese worker labors inside an assembly line of a domestic brand automobile factory in Shenyang in northeast China's Liaoning provincein 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%. But some experts are...
A Chinese worker labors inside an assembly line of a domestic brand automobile factory in Shenyang in northeast China's Liaoning provincein 2007. Third quarter growth swelled the economy by 11.5%, keeping...   (Associated Press)
Chinese works at a large scale garment factory in Hangzhou in east China's Zhejiang province in 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%%. But some experts are waiting for the inflationary shoe...
Chinese works at a large scale garment factory in Hangzhou in east China's Zhejiang province in 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam,...   (Associated Press)
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