BEIJING, April 21 -- China's economy grew 9.5 per cent year-on-year during the first quarter of this year, the National Bureau of Statistics said in Beijing yesterday.

    Bureau Spokesman Zheng Jingping said the nation's first quarter gross domestic product of 3.14 trillion yuan (US$377.8 billion) marked a good start to the year.

    "The economy continues to develop in the direction guided by the government's macro control," he said.

    However, economist Niu Li of the State Information Centre said the economic growth was faster than expected.

    "It will increase worries that the country's fixed asset investment might be rebounding," he said.

    Zhuang Jian, a senior economist with the Asian Development Bank, agreed that first quarter economic growth was "a little bit high."

    It suggests the nation's economy has not yet achieved a soft landing, he said.

    "If the government does not take new measures, including a further rise in interest rates, the economy will show 9.5 per cent growth for the whole year," he said.

    The Chinese Government has taken a raft of macro-control measures since the second half of 2003, such as lending limits on banks and bans on some new fixed asset projects, to cool the over heating economy.

    Last October, the People's Bank of China, the central bank, raised interest rates for the first time in nine years, increasing the benchmark lending rate by 0.27 of a percentage point to 5.58 per cent.

    "The central bank has a possibility to further raise interest rates," Zhuang said.

    China's consumer price index (CPI) rose 2.8 per cent year-on-year during the first quarter of this year.

    "Although the CPI is not so high, the inflationary pressures are still there," he said.

    The producer price index rose 5.6 per cent year-on-year during the first quarter of this year.

    Growth in fixed investment for the first quarter stood at 22.8 per cent year-on-year, he said. This was compared to a figure of 43 per cent growth for the first quarter last year.

    Zhuang said he had confidence the government could keep fixed asset investment and the economy under control.

    
(Source: China Daily)