Exercising its pricing power

摘要

Scorching; blistering; red hot. Chi-nese growth, which has been such a source of support for the world economy in recent years, is now often described as if it were something painful. For the second year in a row, the mainland's economy is expanding at a pace that looks too quick for comfort. In the first quarter of this year GDP was 10.3% greater than a year before; the broad money supply grew by 19% in the 12 months to the end of May; and domestic bank lending jumped by four-fifths in the first five months of 2006, compared with the same period in 2005. All this liquidity is fuelling a frothy investment boom: fixed asset investment is rising at an annual rate of 30%, almost twice the official target. Exports, too, are surging, bolstering China's foreign-exchange reserves, which at almost $1 trillion are now the world's largest. Much of that money seeps back into the economy, further oiling the expansion.