The latest GDP figures from China make startling reading. First-half 2006 GDP grew 10.9%, with second-quarter growth accelerating to 11.2%, the fastest pace since 2003 when China’s economy last overheated. The news has reignited concerns that China’s economy is out of control.
Is it time for the authorities to clamp down? Not according to Jonathan Anderson, chief economist for Asia at UBS. Anderson says that official government statistics are still so unreliable that he doesn’t even use the figures in his own estimates. Instead he points to evidence that growth, while still robust, is already showing signs of slowing. In fact, he says bank credit growth, one of the key culprits in the last China boom-bust cycle, is already below the 2003 rate.