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China's growth zooms, so does inflation
 
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Scorching growth in the Chinese economy is a welcome message for Australian companies and promises to shield the nation’s economy from a US recession and global financial turmoil.
In 2007 China’s economy grew by 11.4 per cent; its fastest rate in 13 years, according to figures released by the National Statistics Bureau in Beijing.

An increase in exports and a boom in the construction industry have helped the rapid expansion, officials say.

Commsec’s chief equities economist Craig James said that these latest figures were positive news for Australia’s mining, energy and engineering companies. Other commentators have indicated that the continued growth could help shield Australia’s commodity-driven economy from a US recession and its impact across the globe.

Despite the impressive growth, officials in China have warned that inflation remains a serious concern, with many Chinese people hit by dramatic food price increases. Pork prices, for example, soared by a massive 50 per cent in 2007.

The BBC reports from Shanghai that keeping China’s ever-expanding economy under control is proving tricky. The government raised interest rates six times in 2007. Inflation hit an 11-year high in November of 6.5 per cent.

In other Asian news, China has said that it may delay coal exports in 2008 to help relieve severe power shortages ahead of the Lunar New Year in early February.

Beijing has called on suppliers to make domestic power generators a priority, as plants struggle to secure coal supplies.

Experts have warned that any delay in exports from China would further tighten already strained supplies in Asia, with coal prices already at record highs. Traders say that Chinese spot export prices now exceed $100 per tonne.

Any export delay from China is likely to benefit Australian coal miners, who are about to begin negotiating 2008 term prices with power generators.

It is thought that Australia’s coal miners are seeking to increase prices to as much as $100 per tonne, up from $55.65 last year, to keep pace with the near-record spot prices.
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Source: Investor TV
Release Date: Friday, 25 January 2008 2:43 PM
Author: Fiona Collins, investorTV
Runtime: 2 minutes 25 seconds

Comments: 0 | Post Comments
Rating: Not Rated
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