Identified as one of the bright spots in the global economy, China recorded more double-digit growth in the third quarter, though the great expansion is slowing.
The robust annualised 11.5 per cent jump in output for the three months to September revealed yesterday is down from the near- 12 per cent figure for the previous quarter. Next year, the IMF expects Chinese growth to slow to 10 per cent.
However, such a pace will put China on target to surpass Germany as the world's third-largest economy by early 2008 in local currency terms. Taking into account the undervalued Chinese currency, the renminbi, some economists place China second only to the United States in global importance even now.
Inflation eased slightly, with consumer prices up 6.2 per cent over the same month last year, down from an 11-year high of 6.5 per cent in August.
The emerging market economies of China, India and Russia are becoming the engines of global growth, as the Western economies stumble after the credit squeeze. These three countries alone will account for a half of total global growth over 2007.
However, the gentle slow-down in China has also been welcomed, with the economy there showing increasing signs of overheating, with higher inflation and bubbles in the equity and property markets worrying Beijing and international bodies alike.
Daniel Melser, an analyst at Moody's Economy.com, said: "Growth had got to an unsustainably high level on the back of surging trade revenues."
The flow of funds from depressed Western markets to China's stock markets in search of high returns is a new factor, and has not helped Beijing to address the biggest "global imbalance" of all – the vast trade surplus with the United States.
Beijing has raised interest rates five times this year, and economists expect one more hike before 2008.