China raises interest rates to cool economy

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The government hasn’t issued a growth forecast for the year, but the World Bank this week said it expects 10.4 percent.

China’s investment in factories and other fixed assets rose by 29.8 percent in the first six months of the year.

But the growth rate in some industries was even faster, hitting 44.5 percent in auto manufacturing and 40.6 percent in textiles, according to a report this month by the country’s main planning agency, the National Development and Reform Commission.

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Beijing has blamed the investment surge in part on local leaders who fail to enforce controls and sometimes initiate projects in defiance of building curbs.

The central government reprimanded leaders of the northern region of Inner Mongolia this week for building an unauthorized power plant. The punishment was widely publicized in the state press in a warning to other local leaders.

Beijing has also had only mixed success in efforts to reduce reliance on exports by encouraging Chinese to spend more on travel, housing and consumer goods.

The country’s trade surplus hit a new monthly high of US$14.6 billion (euro11.3 billion) in July, 40.6 percent over the surplus in the same month last year, according to the government.

China reported a cumulative trade surplus of US$75.9 billion (euro58.9 billion) in the first seven months of the year, up 51.9 percent from the same period last year.

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