MercoPress. South Atlantic News Agency

Chinese economy expands 9,5% in first half

China's GDP expanded 9,5% in the first half of 2005, two tenths less than in the same period of 2004 but with no signs of overheating, according to the latest release from the National Bureau of Statistics.

First half GDP reached the equivalent of 811 billion US dollars pushed by exports and investment in construction and factory equipment.

Bureau Statistics spokesperson Zheng Jingping recalled that China's GDP growth over the last 27 years has averaged about 9,4% which is very much in accordance with the country's "social development" needs.

"Looking at China's development targets we see that we need to preserve fairly high economic growth in order to resolve the employment problem, to lessen the gap between rich and poor and to catch up with developed countries", argued Zheng Jingping adding that "this is the main goal of the macro-economic controls".

"China's high rate of bank savings, investment, robust market demand and abundant labour forces" helped to support the growth rate with investment in fixed assets in the first half of the year increasing by 25%.

China has tried to rein in the economy amid fears of overheating and has introduced measures imposing stricter lending requirements on banks and limiting construction projects by regional governments.

However the government's efforts have had a limited success and analysts are now predicting that 2005 growth will be closer to 9% than the original more conservative 8% targeted by Beijing authorities.

But China's success is also mounting pressure overseas for a revaluation of the Chinese yuan, tied to the US dollar at 8,28 Y for the last ten years, and blamed for the ever increasing trade surpluses with United States and the European Union.

US authorities have been lobbying strongly, and the Bush administration has assured Congress that Beijing will be taking action before President Hu Jintao's official visit to Washington next August.

US Congress has already drafted a bill imposing tariffs on Chinese imports unless the issue is addressed and US Treasury officials have suggested Chinese officials a 10% revaluation would help appease animosity.