China’s GDP jumped 11.9% in the March quarter; almost double the 6.1% growth a year ago when China struggled with the impact of the credit crisis and global slump.
It was the strongest growth in three years and recalled the pace of 2006-2007.
Consumer inflation eased, producer prices edged up, retail sales were sold and other data confirmed the economy remains in a state of strong growth, with no sign of any slowing evident.
The rise in growth was just above forecasts of around 11.5%, and follows a 10.7% annual rate in the last quarter of 2009 and 8.7% across the year as a whole.
It was also well above the 9.6% rise forecast for all of this year by the Asian Development Bank.
Growth was up 11.3% (annual) from the 4th quarter of 2009.
So far this week we have already seen a sharp, 11.7% rise in house prices in the year to March, another rise in the country’s reserves in the first quarter to more than $US2.4 trillion, a surging in car sales, a 66% jump in imports and a 24% rise in exports in the quarter, and near record amounts of iron ore, copper, aluminium and other commodities imported.
Consumer inflation rose a less-than-estimated 2.4% in March from a year earlier, after a 2.7% rise in February.
Producer prices rose 5.9% in March, after climbing 5.4% in February.
Industrial production rose 18.1% in March and 19.6% over the first quarter.
All this news brought the predictable forecasts from western economists of a crackdown in China to slow the economy.
But the State Council has decided to change tack and introduce new property taxes. At least one is being prepared for immediate introduction after the sharp rise in house prices continued in March.
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Crude steel production was up to nearly 55 million tonnes in March, from 50.36 million tonnes in February.
The first three months of last year were very sluggish as China battled the impact of the credit crunch and global recession which chopped into its exports and demand.
Retail sales climbed 17.9% with car sales up 76% in the first quarter from a year earlier.
Urban fixed asset investment increased 26.4% in the first quarter from a year earlier.
Residential and commercial real-estate prices in 70 cities climbed 11.7% in March from the same month a year ago when they were depressed by the slump. The rise in the year to March was the highest since records started five years ago.
China’s State Council said on Wednesday that it has ordered the speeding up of a study of a property tax that could help to cool the market.
The government has already tightening mortgage lending and re-imposing a sales tax and ordered banks to cut lending and to stop taking undeveloped land as security over loans.
Banks have been told to check all property loans, boost payments and security if need be. A team, from the banking regulator will make examinations in the third quarter.
The central bank has twice asked lenders to set aside more cash as reserves this year.
The AMP’s Dr Shane Oliver said the much anticipated Chinese economic data for March came in roughly as expected.
"Inflation actually surprised on the downside falling back to 2.4% over the year to March (down from 2.7% in February).
"The strength in China and a likely further rise in inflation is consistent with further monetary tightening and a move to allow the Renminbi to start appreciating again.
"However, with growth indicators coming in pretty much in line with expectations and inflation falling back a notch and most of the rise in inflation over the last year due to higher food prices there is no need for the Chinese authorities to get aggressive in trying to slow the economy and as such we continue to see a soft landing with growth settling around 10% for China this year."