Another 9% year for China: IMF

WASHINGTON, Sept 21 (Reuters) - The International Monetary Fund on Wednesday raised its 2005 growth forecast for China, the world's fastest-growing economy, and advised Beijing it may need to tighten monetary policy if investment growth rebounds.

In its twice-yearly snapshot of the world's economies, the IMF said Chinese growth was now poised to hit 9 percent this year, up from 8.5 percent predicted in April.

In 2006, the fund expects China's economy to grow 8.2 percent, again up from the IMF's April outlook of 8 percent.

"The expansion in China has continued to exceed expectations," the IMF said in its updated World Economic Outlook report.

The crazy thing is that China is trying to tamp down growth for fear of the economy overheating. Still, they're growing at 9%. For the less-mathematically inclined among you, at 7% growth something doubles every ten years. And China is growing faster than that, with India growing about that fast (7%).

Meanwhile, it looks like Koizumi is going ahead with his plan to privatize Japan's post-office bank, which in theory should allow trillions of savings dollars to flow in to the market. With luck, Japan's recovery (driven largely by that same Chinese growth) will accelerate.

Of course, the downside of all this growth going on is the big oil question. And on that note, a piece from a few weeks back:

Work on a $6bn gas pipeline linking Iran, Pakistan and India will begin in the middle of 2007, officials say.

Petroleum ministry officials from India and Pakistan made the announcement after a meeting of a joint working group in Islamabad.

The United States has expressed reservations over the purchase of natural gas from Iran, a country it accuses of supporting terrorism.

India and Pakistan have both rejected the concerns.

The financial burden of developing nuclear weapons just got a bit easier for Iran, didn't it? And from today:

VIENNA (Reuters) - Russia and China warned the United States and European Union on Wednesday against escalating the nuclear standoff with Iran, potentially blocking a Western drive to haul Tehran before the U.N. Security Council.

The European Union has circulated a U.S.-backed draft resolution calling on the International Atomic Energy Agency (IAEA) governing board to report Iran's secretive nuclear programme to the Security Council, which could impose sanctions.

Western countries suspect Tehran is developing atomic weapons under cover of a civilian nuclear energy programme. Iran insists its programme is peaceful and intended to meet its energy requirements.

Both Russia and China, which as permanent, veto-wielding members of the Council could block any action, warned the West against antagonizing Iran.

"While Iran is cooperating with the IAEA, while it is not enriching uranium and observing a moratorium, while IAEA inspectors are working in the country, it would be counter-productive to report this question to the U.N. Security Council," Russian Foreign Minister Sergei Lavrov said.

Now, I don't think that energy prices are the only reason Russia and China are doing this - Russia is an energy exporter, after all. It's not like the Chinese need another reason to back Iran, but if they did their need for oil would be enough.

All this is convincing me more and more that this is going to be a really bad winter. As heating oil and natural gas prices head up with little relief, this winter is going to see a lot of people - who are already hurting financially for any number of reasons - driven in to poverty. In Canada there's an obvious need to make sure people can heat their homes during the winter.

And in case you think I'm over-stating things, Hurrican Rita is heading for the Texan oil patch, and is being upgraded to a Category 5.