The Chinese economy expanded 10.5% in 2006, the fourth year running it has been growing at double digit pace revealed on Friday Ma Kai head of the powerful Development and Reform Committee, NDRC.
"According to primary figures, China's GDP in 2006 exceeded 20 trillion Yuan with an expansion rate of 10.5%", said Ma. China's GDP in 2005 grew 10.2%. In an interview published in the NDRC web site, Ma argues that the Chinese economy is still growing too fast, which imposes "unacceptable burdens in energy and environment costs". Ma said China had managed to ease the problem of excess capacity by adopting strict measures regarding capital investment squandering but admitted concerns persist regarding the recent moderation in credit and investment expansion, because "it is not sufficiently solid". "The fundamentals for the deceleration of investment and credit awarding are still not sufficiently solid and the problem of our misbalance in international payments is worsening", said Ma. Last year China had a record trade surplus of 177.5 billion US dollars. The overall surplus in China's balance of payments is in the range of 10% of GDP which has triggered growing criticisms from United States, particularly politicians and manufacturing sectors which complain bitterly that Beijing insistence with an artificially low exchange rate "disloyally" benefits the country's exports. However Ma said Beijing will continue in 2007 to secure and polish macroeconomic controls to keep the economy running on strong fundamentals. Last year China adjusted legislation regulating the use of land, energy and environmental protection, in an attempt to keep capital expenditure under control. Furthermore the government publicly accused provincial authorities who ignore central government orders and instructions. However Ma did not advance GDP forecasts for this year. NDRC 2006 final figures are programmed to be officially announced next January 15.