China’s economy will grow by 10.3 percent in the first half of 2006, then slow marginally for a full-year expansion of 10 percent, the central bank said in a new report.

At the same time, inflation will climb slowly, registering 1.3 percent in the first six months of the year and 1.7 percent for the 12 months, according to the report, from the People’s Bank of China’s research bureau.

The forecasts, released over the weekend and published in the Beijing Morning Post on Monday, come despite a stream of government measures aimed at slowing the economy, following growth of 10.3 percent in the first quarter.
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The US trade deficit widened 2.5 percent in April to 63.4 billion dollars as imports of oil and cheap goods from China rose, the government said.
The US trade performance was better than expected by economists, who had predicted an April figure of 65.0 billion dollars. The March deficit came to a revised 61.9 billion dollars.
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China’s net international investment position (IIP) more than doubled last year, largely as a result of its fast-growing economy and an improved international clearing capacity.

China’s net IIP, or overseas financial assets and direct investment minus such liabilities, was US$287.5 billion at the end of 2005, surging by 138 per cent from a year earlier, according to figures released yesterday by the country’s top foreign exchange body, or State Administration of Foreign Exchange (SAFE).
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The eagerly awaited semi-annual Treasury report on exchange rates has finally been released, and the results may have serious implications. Many members of Congress, among others, had been hoping the US would use the report to officially label China a currency manipulator, which would justify the use of trade sanctions and other economic penalties.
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