MercoPress. South Atlantic News Agency

China rolls on at 11.5% soon to become third largest economy

China's booming economy has grown by 11.5 percent in the third quarter, slightly less that the 11.9% of the previous quarter. Beijing efforts to slow the rapid expansion. The continued growth has put China on track to surpass Germany as the world's third largest economy, by as early as December.

Growth was fueled by foreign trade that rose by 23% and investment in fixed assets, such as factories and roads, which were up by nearly 26% reported on Thursday the National Bureau of Statistics Beijing has implemented numerous changes in an attempt to rein in the economy, including tightening credit and allowing a slow rise in the value of the currency but growth continues to remain in the 11 percent range, extremely high by world standards. Nevertheless, a spokesman for the National Bureau of Statistics, Li Xiaochao, maintained Thursday that the government's efforts had brought the economy under control, from "overheating" to one of "speedy growth". Consumer prices, a key inflation indicator, reached 6.2% in the last twelve months to September. Overall inflation for the first three-quarters was 4.1%, significantly above the government's target of three percent. Food prices have increased by more than 10% so far this year, with meat and poultry up by 29%, a warning signal that inflation could get out of control. The public is already complaining about a large increase in the price of pork, a basic part of the Chinese diet. On a brighter note, Li says incomes have risen more than 13% in the cities and 14% in the countryside, and companies are more profitable. But he acknowledged that the economy still faces serious challenges. However Li acknowledged that institutional, systematic, and structural problems in economic performance continue, including rapid economic growth, price rises, high pressure on energy consumption, the need to reduce pollution, and the uncertainty of the world economy. Chinese officials have tried to tighten the money supply to prevent overheating and speculative investment. They say they want to reduce the risk of borrowers defaulting on loans, by curbing credit and restricting land use. But even though interest rates have been raised five times this year and bank reserve requirements eight times, government figures showed cash in circulation was up by 13%, and outstanding loans increased 19%. China's politically sensitive trade surplus was also up by 75 billion US dollars for the period, to 185 billion. This will likely lead to more international pressure on China to further revalue the Yuan. China's foreign currency reserves, already the largest in the world, rose by 45% to more than 1.4 trillion dollars. In related news it was announced that China's biggest bank will acquire a 20% stake in South Africa's largest bank for 5.5 billion US dollars. Cash rich state owned Industrial & Commercial Bank is investing in Standard Bank The deal will put the two firms "at the crossroads of economic interaction between China and the African continent", said the South African company from Johannesburg