Li Xiaochao, spokesman of the National Bureau of Statistics, speaks at a press conference on China's economy in Beijing, October 25, 2007. Photo: china.org.cn

China's economy grew 11.5 percent in the third quarter, despite government efforts to dampen surging economic activity.

Today's data puts China's economy on track to overtake Germany as the world's third-largest, after the US and Japan.

China's economic growth was propelled by a double-digit surge in exports and soaring investment in factories and other fixed assets despite repeated increases in interest rates this year.

Li Xiaochao, spokesman for the National Bureau of Statistics said at a press conference in Beijing on Thursday, that the increase in China's aggregate growth was the highest in a decade.

Fixed asset investment rose 25.7 percent in the first nine months of this year, according to Li.

Consumer price index (CPI), slowed down to 6.2 percent in September from an 11-year-high of 6.5 percent in August, putting the figure for the first nine months at 4.1 percent.

This number is above the official target of 3 percent for 2007.

The rapid growth of the GDP, and credit and investment has increased pressure for further monetary tightening. The central bank has raised interest rates five times this year to 7.29 percent and bank reserve ratio eight times so far this year.

The People's Bank of China raised the one-year benchmark deposit rate by 27 basis points to 3.87 percent and the one-year lending rate by the same amount to 7.29 percent, effective from September 15th last.

Last week, People's Bank of China Governor Zhou Xiaochuan, pledged to take a more aggressive approach to prevent the economy from overheating.

Zhou pledged to use monetary tools to keep the economy on track, including interest rates and exchange rates, adjustments in bank reserve ratios, and open market operations.

Chinese analysts say that as the CPI for September has eased, it is too early to predict whether the central bank will raise interest rates again.