China chalked up unexpectedly strong annual growth in the first quarter of 11.9%, prompting renewed calls for tighter policies to prevent the world's third largest economy from bubbling over.
The rate of expansion, the fastest since 2007 and above average forecasts, was flattered by a low base of comparison a year earlier, when the economy was reeling from the global financial crisis.
But economists said the figures, released today by the National Bureau of Statistics, were unquestionably sturdy and would justify a firmer policy stance to nip inflation in the bud.
Not all economists said it was urgent for Beijing to slam on the brakes. They noted that the government is already winding back its anti-crisis investment spending and has ordered banks to reduce new lending by over 20% in 2010.
While property prices leapt 11.7% in the year to March, consumer inflation remains under control. The consumer price index rose 2.4% in the year to March, below market expectations of a 2.6% increase.
So far this year the Chinese central bank has twice raised the proportion of deposits that banks must hold in reserve and has also aggressively drained cash from the banking system.
But unlike a clutch of Asian neighbours, including India and Malaysia, China has kept its benchmark interest rates unchanged even though it is leading the global recovery charge.
China has not tightened financial conditions by pushing up its exchange rate - despite quiet, persistent pressure from the US, which believes a cheap yuan gives China an unfair edge in global markets.
The Chinese Commerce Ministry today reaffirmed its opposition to a stronger yuan, arguing that it would do nothing to solve the problem of near double-digit US unemployment.
In addition to quarterly GDP, China today released a batch of figures for March that were strong and close to expectations. Retail sales rose 18% from a year earlier, industrial output expanded 18.1%, and urban investment in fixed assets such as roads and factories rose 26.4% in the first quarter.
'This year, the economy's momentum has increased. We are off to a good start,' statistics office spokesman Li Xiaochao said.
