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China's GDP growth hits 11.5% in first nine months

    BEIJING, Oct. 25 (Xinhua) -- China's GDP was up 11.5 percent in the first nine months from the corresponding period last year, said the National Bureau of Statistics (NBS) here on Thursday.

    GDP rose by 11.5 percent in the third quarter, decreasing from 11.9 percent in the second quarter but higher than 11.1 percent in the first quarter.

    The figure, far above the official growth target of eight percent for the whole year, indicates China is on track to post double-digit growth for the fifth year in a row in 2007.

    Song Guoqing, a well-known economist with Peking University, said export reduction led to the GDP slow-down.

    Chinese government adjusted its export rebate policy from July, reducing or canceling the export rebates for products ranging from clothes to toys.

    "In fact, traders exported their goods as many as possible before the rebate cut," Song said, "and that's why we see the GDP growing by 11.9 percent in the second quarter and 11.5 percent in the third quarter."

    "Therefore, we still have to wait for the Oct. statistics to see the impacts of the curbing measures," Song said.

    According to the NBS, the country's foreign trade jumped by 23.5 percent to 1.57 billion dollars, down 0.8 percentage points from a year earlier.

    Exports, the main driver of China's economy, grew by 27.1 percent to 878.2 billion dollars, 0.6 percentage points higher, while trade surplus reached 185.7 billion dollars, up 75.8 billion dollars over the same period last year.

    Although yuan is appreciating against the U.S. dollar continuously and broke the 7.5 mark against one dollar Wednesday, exports keep rising as half of the good were exported by foreign-funded enterprises, who use dollars in transaction settlement, according to experts.

    It leaves China few options but to curb investment, a major factor for the GDP growth only next to foreign trade, said Zhuang Jian, senior economist with Asian Development Bank Resident Mission.

    The central bank may continue to raise interest rate or the deposit reserve ratio for commercial banks to increase investment cost, he said.

    People's Bank of China announced to raise the reserve requirement ratio by half a percentage point to 13 percent for commercial banks from October 25.

    This is the eighth such move this year and only one month after the seventh hike of half a percentage point on September 25.

    Meanwhile, China may have one or two interest hikes by year end to curb investment, predicted Song.

    China, the fifth time in a year, raised the one-year deposit and loan interest rates by 27 basis points to 3.87 percent and 7.29 percent respectively from Sep. 15 in a bid to curb rising inflation and tighten control over excessive liquidity.

    According to the NBS, China's GDP reached 16.6 trillion yuan in the first three quarters, with growth rate 0.7 percentage points higher than the same period of 2006.

    The primary sector reported 1.82 trillion, the secondary sector8.35 trillion and the tertiary sector 6.44 trillion yuan in added value in the first three quarters, with the secondary sector, including manufacturing, mining and construction, growing at 13.5 percent, 0.2 percentage points up from the same period of 2006.

    The primary sector posted a growth rate of 4.3 percent and the tertiary sector, including transport, telecommunications, catering, tourism, banking and insurance, recorded an increase of 11 percent. (One U.S. dollar equals 7.49 yuan)

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