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HONG KONG Economic growth accelerated in China to a blistering 9.5 percent in the fourth quarter even as inflation slowed, the National Bureau of Statistics said Tuesday, as Chinese officials promised to maintain existing controls on speculators but no new economic measures. Just nine months after the economy seemed on the verge of an upward spiral of higher wages and prices, Beijing appears to have had considerable success in keeping growth at a brisk pace while bringing inflation under control. But private sector and academic economists are deeply divided over whether inflation can stay low, as Chinese leaders have eased some of the administrative controls that they imposed last spring. Li Deshui, the commissioner of the National Bureau of Statistics, said at a news conference in Beijing that policy makers would be cautious in controlling those sectors of the economy that produced some of the most feverish growth a year ago. "We must continue to strengthen and improve macro adjustment, and we can't relax, especially in managing land and credit - we need to closely guard those two gates," he said. Later he added, "In particular, we must guard against a rebound in fixed-asset investment." China brought inflation down to an annual rate of 2.4 percent last month from 5.3 percent in August through a combination of Herculean investments to relieve transportation and electricity bottlenecks, sometimes draconian administrative controls and a handful of market-based measures. Last winter, ships had to wait up to a month to discharge iron ore and other bulk cargoes at overcrowded Chinese ports, power outages were widespread because of inadequate generating capacity and food prices leaped as demand surged faster than Chinese farmers could increase production. But shipping industry executives and manufacturers alike said in interviews over recent weeks that the port delays, blackouts and food price increases had diminished in recent months. "Our ships call on China," said Sanjay Mehta, chief executive of Essar Shipping in Mumbai, "and it's a pretty quick turnaround, particularly for our tankers. They realize they cannot afford bottlenecks." Liang Hong, an economist with Goldman Sachs in Hong Kong, said that the government had expanded the capacity of many ports by 30 percent to 60 percent within months, a task that would take years in practically any other country. China also increased electrical output 14 percent last year alone. "This is still a centrally planned regime," she said. "When it puts its money behind something, it gets done." The administrative controls imposed last spring included strictly enforcing land-use regulations, denying loans from state-owned banks to projects without government approval and even jailing business people and bank loan officers who let projects proceed without proper authorization. But the arrests in particular appear to have slowed in recent months, or at least are no longer being trumpeted by the state-controlled media. Market-based initiatives last year were mostly confined to bond sales, a single small increase last autumn in regulated lending rates and three small increases a year ago in the reserves that banks must keep on deposit with the central bank. Some economists say the recent slowdown in inflation is no more than a temporary lull. He Jun of Anbound, a consulting firm in Beijing, said that strong growth throughout last year despite various government controls showed the resilience of the Chinese economy and suggested that inflation could yet prove hard to control. But Wang Xiaolu, the deputy director of the National Economic Research Institute in Beijing, said that China had succeeded in bringing down the prices of many commodities around the world by taming its domestic demand somewhat. |
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