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Children sleep in the open air as their parents build up a tent after a quake in Yushu County, northwest China's Qinghai Province, April 14, 2010. The 7.1-magnitude earthquake hit Yushu early on Wednesday. Photo: Xinhua
China's GDP (gross domestic product) grew 11.9 per cent in the first quarter of 2010 from a year earlier. The increase is 5.7 percentage points higher than the same period in 2009 when economic growth slowed to 6.2 per cent, the lowest in a decade.
"With the implementation of the stimulus package to combat the global financial crisis, the Chinese economy achieved a good start this year as the recovery momentum continues to consolidate, laying a solid foundation to meet the annual economic target," National Bureau of Statistics (NBS) spokesman Li Xiaochao said. "The 11.9 per cent growth in the first quarter is largely a result of last year's low comparison base, and the government's stimulus," Li added.
China's retail sales rose 17.9 per cent year on year in the first quarter, the NBS also reported. Boosted by a series of government measures, sales of cars, furniture and home appliances and audio visual equipment jumped 39.8 per cent, 37.6 per cent and 29.6 per cent, respectively; consumer prices rose 2.4 per cent in March from a year earlier, compared with 2.7 per cent in February and China's industrial output increased 19.6 per cent year on year in the first quarter - - a 14.5 percentage points rise from the same period last year. In March, the increase was 18.1 per cent year on year; exports jumped 29 per cent in the first quarter.
China's economic development environment remains "very complex" with difficulties and problems persisting in the process of its economic recovery, China's Cabinet, the State Council, said on Wednesday.
The national economy was heading toward the goal of macroeconomic regulation, with a strong foundation for economic recovery, according to a statement following a meeting chaired by Premier Wen Jiabao.
The statement said fast economic growth can be, to a large extent, attributed to the RMB 4trn yuan/renminbi (US$585bn) crisis stimulus package that was launched in late 2008.
With trade protectionism on the rise (ie. pressure for China to revalue its currency) and major economies suffering from climbing unemployment rates, uncertainties remained in the global economy, said the statement.
The statement also said the government would introduce measures to boost agricultural production, improve financial management and regulation, stabilise prices, rein in soaring property prices, expand domestic demand, push forward economic restructuring, increase energy saving and promote emission cuts.
China's economy is not overheating due to the impact of policy tightening in the past few months and the risk of any further dramatic tightening is unlikely based on today's data, says Chi Lo, head of overseas investment at Ping An of China Asset Management, speaking to CNBC's Oriel Morrison:
Deutsche Bank chief China economist Jun Ma said in a note to investors: "We think there is now a clear consensus that property bubbles, inflation, and overheating are major risks to the economy. Specific actions to cool off the property markets and control bank lending for infrastructure investments will be intensive in the coming 1-3 months, and further measures (including administrative price controls) to stabilise CPI will likely be adopted from June-July when CPI inflation rises to 4 per cent yoy."
Lending by Chinese banks fell 43 per cent in the first quarter from a year earlier according to data issued today.
Banks lent RMB 2.6trn ($380.7bn) in the January-March quarter, the People's Bank of China said today. That compared with RMB 4.6trn ($670.6bn) in loans in the first quarter of 2009
China's focus this year has been to restrict credit availability rather than increase interest rates.