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Chinese officials have announced that the country's economy has expanded by 11.4 per cent over the past year - its fastest growth since 1994.

The National Statistics Bureau in China, which unveiled the figures, says an increase in exporting and a surge in the construction industry have been the main contributors.

It has led many commentators to suggest that the far eastern giant has now surpassed Germany as the world's third-largest economy.

However, the speed of growth has led to concerns over inflation, which has caused civil unrest in the past because of the large numbers of low income families in China.

Inflation reached a seven-year high in November, and while it fell back slightly in December it remains at 6.5 per cent and continues to impact on the basic price of essentials, such as heating, water and food costs.

The unique nature of China's ever-expanding economy means that while other major economies around the world are being forced to cut interest rates, the Chinese authorities will likely need to continue raising them if they are to keep inflation under control.

Nevertheless the head of the National Statistics Bureau, Xie Fuzhan, said the government would be carefully monitoring the ongoing global credit crunch by making "timely and proper adjustments" to its exchange and interest-rate policies.

And while he acknowledged the experts who are predicting China has usurped Germany in the global economic pecking order, Mr Xie said it matters little as China "is still a developing country" and the "per capita GDP… is very low".

"It's not really important to know whether China is the fourth-largest or the third-largest," he added.