Statistics
Chinese economy expands 9.7% in Q1
(Xinhua)
Updated: 2011-04-15 10:10
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Chinese economy expands 9.7 percent in Q1
BEIJING -- China's economy expanded 9.7 percent in the first quarter of 2011 from a year earlier, and 2.1 percent from the previous quarter to 9,631.1 billion yuan ($1,459.3 billion), the National Bureau of Statistics (NBS) said Friday."The national economy had a good beginning with steady and relatively fast growth," said Sheng Laiyun, spokesman of the NBS.
In the fourth quarter of 2010, the economy grew 9.8 percent year on year from 9.6 percent in the third quarter, after slowing down from 11.9 percent in the first quarter and 10.3 percent in the second.
"The pace eased slightly in the first quarter but will pick up in autumn. The figure shows the tightening measures are taking effect," said Zhu Jianfang, chief economist with CITIC Securities.
Consumer prices rose 5.4 percent in March from a year ago, a 32-month high, said the NBS. The country aims to hold inflation at around 4 percent for the full year.
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On April 5, the central bank announced the second interest rate hike this year. It was also the fourth increase since the start of 2010.
"Emerging markets will continue to face inflationary pressures if developed economies do not halt their quantitative easing policies. Monetary polices have limited effects in curbing consumer prices, but they are necessary in managing inflation expectations and preventing hyper-inflation," said Guo Tianyong, a professor with the Central University of Finance and Economics.
Retail sales rose 16.3 percent year on year in the first quarter, compared with 15.8 percent during the first two months.
The State Council, China's Cabinet, has pledged to continue the country's prudent monetary policy to rein in soaring prices.
"Judging from the inflation situation in the first quarter, we are still under great pressure of price hikes," said Premier Wen Jiabao at an executive meeting of the Cabinet on Wednesday, adding, "We should never lower our guard."
Consumer spending, regarded as one of the three engines driving China's economic growth, contributed 5.9 percentage points in the 9.7-percent GDP growth for the first quarter, according to the NBS. It contributed to about 37 percent of China's 39.8 trillion yuan of GDP last year.
Sun Chi, an analyst with the Nomura Securities, said inflation pressure would persist for a period of time, which indicated the monetary tightening circle was only in its early days.
"We expect interest rates will be lifted by another 75 basis points this year, and bank's reserve requirement ratio will be increased by another 100 basis points," he said.
As for the other two engines of economic growth, foreign trade and investment both accelerated in the first quarter.
The country's foreign trade volume surged 29.5 percent to $800.3 billion, with a trade deficit of one billion US dollars in the first quarter. The deficit pulled GDP growth down by 0.5 percentage points in the first quarter, said the NBS.
Urban fixed asset investment rose 25 percent to 3.9465 trillion yuan, with investment in the property sector rising 34.1 percent year on year to 884.6 billion yuan. Investment accounted for 4.3 percentage points in the first quarter GDP growth, according to the NBS.
China has set its GDP target for 2011 at 8 percent.
Consumer inflation hits 32-month high, more rate hikes in sight
China's consumer price index (CPI), a main gauge of inflation, rose 5.4 percent in March from a year ago, a 32- month high, the nation's statistic agency said on Friday.
CPI stood at 5 percent for the first quarter, according to the National Bureau of Statistics (NBS).
Food prices surged 11 percent year-on-year.
Sun Chi, an analyst with the Nomura Securities, said inflation pressure would persist for a period of time, which indicated it was only early days in the monetary tightening circle.
"We expect the interest rate will be lifted by another 75 basis points this year. The bank's reserve requirement ratio will be increased by another 100 basis points," he said.
Chinese Premier Wen Jiabao said Wednesday that keeping the price levels basically stable was the primary and most urgent task for the government's macro economic control this year.
"Judging from the inflation situation in the first quarter, we are still under great pressure of price hikes," Wen said, adding, "We should never lower our guard."
Wen expected inflation pressure to continue in the coming months due to soaring commodity prices around the world, higher food and housing prices, and higher labor costs in China.
The People's Bank of China, the central bank, announced the second interest rate hike this year on April 5. It was also the fourth increase since the start of 2010.
After the increases, the one-year deposit interest rate will climb to 3.25 percent while the one-year loan interest rate will reach 6.31 percent.
To mop up the excessive liquidity that helps fuel inflation, China's central bank has raised the reserve requirement ratio for commercial banks nine times since the beginning of last year.
March PPI growth advances to 30-month high
China's producer price index (PPI), a main gauge of inflation at the wholesale level, rose 7.3 percent in March from a year ago, the highest in the past 30 months, the statistical agency said on Friday.
PPI was up 0.6 percent from February. The quarterly PPI was up 7.1 percent year-on-year, the National Bureau of Statistics (NBS) said.
China's consumer price index (CPI), a main gauge of inflation, rose by a 32-month high of 5.4 percent in March.
The Chinese Premier Wen Jiabao warned on Wednesday that the country should never lower its guard against inflation, and expected inflation pressure to continue in the coming months due to soaring commodity prices on global markets, higher food and housing prices, and higher labor costs at home.
The purchase prices of major industrial materials increased 10.2 percent in the first quarter year on year, and was up 10.5 percent in March, the NBS said.
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