Economics

The International Monetary Fund (IMF) raised China's economic growth forecast for 2007 to 11.2 percent, up 1.2 percentage points from its forecast in April. The growth in China for 2008 is expected to be 10.5 percent, 1.0 point higher than the earlier forecast, the IMF said in a revision of its World Economic Outlook (WEO). China has accounted for one quarter of the annual growth rate of the world economy, adding that China, together with India and Russia, would provide half the growth.

The Chinese government will probably limit or ban the processing trade of high-polluting and high-energy-consuming industries within the year based on studies of the domestic and international markets, according to the Ministry of Commerce (MOC). The new policy seeks to curb the development of the processing trade in labor-intensive industries covering 1,853 products in plastics, furniture, textiles, and other industries. Meanwhile, the government will continue to encourage labor-intensive industries to shift from the eastern regions to the central and western areas.

A leap in the shares of the Industrial & Commercial Bank of China on Monday made it the world's biggest bank by market capitalization, overtaking U.S. giant Citigroup. ICBC's Shanghai-listed A shares surged 2.68 percent to 5.75 yuan (US$0.76), giving it a market capitalization of US$254 billion. That exceeded the US$251 billion capitalization of Citigroup, previously the world's biggest bank, when its shares closed at US$50.73 in New York on Friday. HSBC Holdings was in third place with US$215 billion. But some analysts believe ICBC's ballooning capitalization may also be a sign of a dangerously overheated Shanghai stock market as speculating Chinese investors pour money into shares.