China chalked up unexpectedly strong year-on-year growth in the first quarter of 11.9 per cent, 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, 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.
"We think in absence of a dramatic fall in external demand, it is critical for the government to tighten policy more decisively than they have been doing in order to prevent overheating," Goldman Sachs economists Yu Song and Helen Qiao said in a note to clients.
However, 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 more than 20 per cent in 2010.
And while property prices leapt 11.7 per cent in the year to March, consumer inflation remains under control. The consumer price index rose 2.4 per cent in the year to March, below market expectations of a 2.6 per cent increase.
So far this year the 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.
In addition to quarterly GDP, China released a batch of figures for March that were strong and close to expectations.
Retail sales rose 18.0 percent from a year earlier, industrial output expanded 18.1 per cent, and urban investment in fixed assets such as roads and factories rose 26.4 percent 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.
Reuters