Is China s Economy Growing Too Fast

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Is China's Economy Growing Too Fast?

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China's economy is growing too fast and this could become a problem


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The President of China - Hu Jintao, announced Sunday that the economy
grew faster than expected - 10.2 percent in the first quarter of 2006
compared with one year earlier, but said the government was concerned
about overly rapid growth. Chinese leaders have warned repeatedly that
rapid growth could spark inflation or leave the country littered with
unneeded factories and luxury apartments, causing problems for banks that
financed them. "We do not seek high-speed economic growth," Hu Jintao
said during a meeting with a former Taiwan opposition leader in Beijing.

The Premier Wen Jiabao and other members of the State Council, or
Cabinet, on Friday called for the policy changes after examining data on
money supply and investment in buildings, factories and other fixed

China plans to reduce its GDP from an annual average of 9.5 percent in
the past 25 years to 7.5 percent in the next five years from 2006 to 2010
by improving economic quality and making domestic consumption the major
driving force for economic growth.

Hu Jintao announced first quarter growth figures during a meeting with
former head of Taiwan's Nationalist Party Lien Chan carried live on
state-run television. China issued new rules allowing mainland tourists
to visit Taiwan, continuing Beijing's efforts to court the disputed
island with economic overtures, but it was unclear when any Chinese
tourism to the island would start.

China announced possible aviation, agriculture and finance concessions to
Taiwan at an economic forum in Beijing attended by Chinese Communist
officials and Taiwanese opposition politicians. However Taiwan must
accept it belongs to "one China" as the precondition for talks, Hu Jintao
told Lien Chan, the former chairman of Taiwan's main opposition
Nationalist Party, who led the delegation of business leaders and party
officials to the two-day forum. Chinese President Hu Jintao says new
talks with rival Taiwan should begin as soon as possible to maintain
peace in the region.

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