CHINA: GDP growth accelerates, inflation tame

Record ID: 610774

  • Title: CHINA: GDP growth accelerates, inflation tame
  • Date: 16th April 2010
  • Summary: BEIJING, CHINA (FILE) (REUTERS) EXTERIOR OF BANK OF CHINA HEADQUARTERS ELECTRONIC BOARD MONEY COUNTING MACHINE BANK TELLER FEEDING NOTES INTO MACHINE MACHINE COUNTING MONEY
  • Embargoed: 1st May 2010 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: Finance
  • Reuters ID: LVA31SQKENEIVQVNX5MTL5R2YUBF
  • Story Text: China's economy roared into the first quarter, logging a surprisingly strong 11.9 percent year-on-year growth in the first quarter, China's National Bureau of Statistics said on Thursday (April 15).
    The rate of expansion, the fastest since 2007, supports the case for tighter monetary policy to avert the risk of overheating and spokesman Li Xiaochao said China would remain cautious.
    "The environment for economic development is still fairly complicated and we are still faced with a lot of difficulties and problems in the course of economic recovery. We should be guided by a scientific outlook on development, implement the policies set by the Central Party Committee and the State Council, maintain the continuity and stability of these policies and continue to carry out the pro-active fiscal policy and moderately-easy monetary policy," he said.
    It was above the median forecast of 11.5 percent in a Reuters poll, was flattered by a low base of comparison a year earlier, when the economy was reeling from the global financial crisis.
    China posted its first trade deficit since April 2004 in March, and is expected to record more trade deficits in the first half of this year, China's Commerce Ministry said on Thursday, a trend that Li put down to the rate of economic global recovery.
    "The domestic economy's recovery has a good momentum, domestic demand is increasing strongly, which leads to an increase in imports, at the same time the global economy is still having difficulties recovering, exports demand is still weak," he said.
    Economists said the figures were undeniably robust and would justify a firmer policy stance to nip inflation in the bud, speculating that the figures could signal that the time is right for a revaluation of the yuan, and a widening of its trading band.
    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.
    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's March retail sales rose 18.0 percent from a year earlier, in line with forecasts; industrial output expanded 18.1 percent, just a touch below expectations; and investment in fixed assets in urban areas such as roads and factories rose 26.4 percent in the first quarter, beating forecasts of a 26.0 percent increase.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register