China's Still Booming, but What About Inflation?

11.5% growth pushes prices worldwide
By Jim O'Neill,  Newser Staff
Posted Oct 25, 2007 8:37 PM CDT
China's Still Booming, but What About Inflation?
Chinese workers set up scaffoldings at a construction site in Beijing in 2007. Third quarter growth swelled the economy by 11.5%, keeping China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%. But some experts are waiting for the inflationary shoe to drop. (AP Photo/Andy Wong)   (Associated Press)

China's economy is booming and inflation is in check, but for how long? Third quarter growth swelled the economy by 11.5%, putting China ahead of Asian rivals India and Vietnam, and inflation dropped to 6.2%. Beijing says it will keep falling, but inflationary fears sent the Shanghai stock market down 4.8% today, the New York Times reports

Beijing has set price controls to offset high wages and prices, hoping to stop the economy from "transitioning from speedy growth to overheating," an official said. One economist calmed fears by equating high wages to high output, not inflation. But with interest rates at half of inflation and money supply swelling, some experts are waiting for the inflationary shoe to drop. (More world economy stories.)

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