Chinese economy soared in 2004

BEIJING — China’s economy expanded at its fastest pace in eight years in 2004, growing at an annual rate of 9.5 percent despite efforts to slow its blistering pace in order to avert inflation, the government said Tuesday.

The figures exceeded economists’ forecasts and were well above the official target of 8 percent.

The report followed a full year of curbs on investment and credit aimed at bringing growth down to a more sustainable pace and easing inflationary pressures.

Despite the surging growth, consumer prices in December were just 2.4 percent above the same month the previous year, the National Bureau of Statistics said in an annual economic report.

China’s stunning growth has led to fears that it could ignite politically dangerous inflation and leave the country littered with unneeded factories and shopping malls, burdening frail Chinese banks with unpaid loans.

Surging demand for power has led to widespread shortages. China has grown into one of the world’s biggest oil importers, and analysts say its consumption is nudging up global prices.

Chinese imports of crude oil jumped 35 percent last year to 123 million tons (861 million barrels), the statistics bureau said.

But President Hu Jintao and other Chinese leaders have expressed confidence that the government can control inflation and possible strains on China’s financial system despite overshooting its growth targets.

Total economic output for 2003 rose to 13.65 trillion yuan ($1.65 trillion), the statistics bureau said.

Bureau commissioner Li Deshui said China brought “unstable and unhealthy factors” in its economy under control last year.

Looking to 2005, Li said he expected a favorable economic environment, with stable and rapid growth and a mild increase in prices.

China’s economy grew by 9.1 percent in 2003. Booming expansion in some industries such as steel, cement and construction have strained energy and transport, pushing prices higher.

The last time China’s economy grew at a faster pace was in 1996, when it reported growth at 9.6 percent.