Anywhere else in Asia, achieving seven per cent economic growth would be seen as a tremendous achievement. But not in China. Yesterday's confirmation that growth in the first half of this year fell short of the target rate of eight per cent came as no surprise. Given the continuing severity of the Asian financial crisis, coupled with the recent floods in 10 southern provinces, the only real surprise is that the figure did not slip even further. China has done far better than expected in coping with the consequences of devaluations elsewhere in the region, even managing to improve its trade surplus in the first half of this year. While exports within Asia have collapsed because mainland firms are priced out of the market by cheaper local currencies, so far this has been more than compensated by increased exports to the booming European and United States markets. That should help debunk the popular myth in the financial markets about the supposed inevitability of a devaluation of the yuan. But there are still problems. Since export orders are unevenly spread across China, some areas are suffering while others are prospering. Modern cities such as Shanghai and Shenzhen, which deal extensively with firms in Europe and the US, have recorded growth rates in excess of 10 per cent. But the north-east, which has close links with South Korea, has been hard-hit by a 30 per cent fall in orders from Seoul. That explains why some exporters in those provinces have recently begun calling for a devaluation, in defiance of Beijing's official policy. It also shows how recent events have sharpened regional inequalities within China. For several years this has been a growing problem. Now the Asian crisis has made it one which the Beijing leadership can not afford to ignore.