China's economy grew by 9.7% in the first quarter of 2004 compared with a year earlier, the government said today, warning that companies are investing at too fast a pace.
Asia's second-largest economy was fueled by spending on new plant and equipment in the first three months, with investment in fixed assets rising by a breathtaking 43%, according to the National Bureau of Statistics.
The first quarter economic growth figure compared with a 9.9% expansion in the fourth quarter of last year and 9.1% for all 2003.
A NBS spokesman said the economy had kept the momentum of fast growth since early 2004 but acknowledged there were 'problems.' 'The scale of investment in fixed assets is too large and growth is too fast,' he said.
In announcing the figures, the bureau cited growth of investment in fixed assets as presenting problems in economic development. 'The blind and repeated investment in low-level construction projects in certain industries and selected areas is not being put under effective control,' it said.
Investment in real estate projects, an area of particular concern among policy makers, was up by a staggering 41.1% in the first quarter, according to the NBS figures. 'This leads to bottleneck restrictions in the supply of major raw materials, energy and transportation, and greater pressure for price rises,' the NBS said.
The statistics bureau said the consumer price index rose 2.8% in the first quarter, compared with just 0.5% in the same period last year. Retail sales were up 10.7%, or 9.2% when adjusted for inflation.
The first quarter GDP figure was marginally above expectations and followed a slew of government statistics showing very brisk economic activity in the first three months.
