China will overcome Germany as the world's third largest economy in weeks after figures released today revealed its economy grew by 11.5 per cent in the third quarter of this year.
Growth beat economists' forecasts but was below the 11.9 per cent rate reported the previous quarter.
Chinese officials were quick to claim that the small deceleration was a sign that repeated interest rate hikes and other controls were finally taking effect.
"Due to macro-economic controls, we have turned the economy from being an overheating one to being one of speedy growth," said a spokesman for the National Bureau of Statistics.
The communist government wants to maintain fast growth to ease poverty but worries that runaway expansion or over-investment in assets could ignite a financial crisis. Beijing has raised interest rates five times this year to curb spending on factories, real estate and other assets, and economists expect another rise later in the year.
China's recent surge has prompted foreign analysts to raise forecasts for this year's growth to as high as 11.5 per cent. It would be the fifth straight year of double-digit expansion.
China's growth has been driven by exports and in construction and other investment. The government is trying to reduce reliance on exports by encouraging Chinese consumers to spend more, but that effort has been slow to take effect.
Beijing also has imposed economic curbs ranging from a ban on building new luxury villas to taxes meant to discourage exports of steel and other products deemed too dirty or energy-intensive.
Total third-quarter economic output was $2.2 trillion, according to the statistics bureau.
China is now on track to overtake Germany in December or early in 2008 as the world's third-largest economy after the United States and Japan. But per capita income for China's population of 1.3 billion people will still be far smaller than that of those economies.
China reported total economic output last year of $2.7 trillion, compared with Germany's $3 trillion. Germany is forecasting 2.3 per cent growth this year, well below China's brisk rate.