China's Economic Growth Surges

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Source VOA News, 17. 08. 2010.
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By VoaNews.com

China's economy grew at a strong pace in the first quarter of this year, but financial experts warn that the world's third-largest economy may be on the verge of overheating.

China's economic growth rate surged to 11.9 percent for the first quarter of this year. The government also reports that the inflation rate was 2.2 percent, which is lower than the government's target.

The economic expansion this quarter is nearly double that of the same period last year.

Li Xiaochao, with the National Bureau of Statistics, said Thursday the government is so far pleased with results.

Li says the government believes the figures show that the measures it is taking to respond to the global financial crisis are "correct and effective."

Li said China faces many challenges - such as a drought in the southwest, constraints on farmers' income and high prices for industrial goods, which could affect efforts to meet the target of eight percent growth for the whole year.

Stephen Green, the senior China financial analyst for Standard Chartered Bank in Shanghai, warns that the results hint at possible problems for the Chinese economy in the near future.

"Yeah, we think it's signaling strong growth. The economy shows signs of overheating," he said. "The government has already withdrawn some of its stimulus measures. It probably needs to do a little bit more, although there is a huge debate about that in Beijing at the moment."