China's Growth Rate to come down in 2007

Finally China's GDP's flight has attained a stable altitude. It has reached 10.5 percent for the overall year after climbing down from 11.5 percent in the second quarter. While its industrial profits were at a peak of 30.1 percent in the first ten months of the year.

This stabilizing effect was due to the introduction of various macro-economic measures by the government of China. A spokesperson said that the policies introduced by the government would stabilze the economy for the fourth quarter as well as for the starting of the next year to build a solid foundation for economic development.

However the foundation for macro-economic control is not yet solid because fixed asset investment and new loans in the banking system are still growing fast, said Yao Jingyuan, chief economist of the National Bureau of Statistics of China.

Yao also said that the trade surplus of 2006 will exceed $150 billion which will create less excess liquidity in the banking system, while Foreign exchange reserves have topped $1 trillion already.

Another plan of China is to increase wages for government employees by the end of the year in order to raise urban incomes. China is basically aiming to discourage investments and exports by increasing interest rates for expansion of industries.

Some experts on the other hand have advised China to re-consider their policies as there are signs of the world's economic growth slowing down next year. Only time will tell what China's policy next year will be.

The world bank is also urging China to increase its spending on health care , education and social security rather than its citizens putting all their money in banks. China is currently the most populated country in the world with a population close to 1.3 billion.