BEIJING, April 15 (Xinhua) -- 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 U.S. dollars), the National Bureau of Statistics (NBS) said Friday.
"The national economy has a good beginning given the steady and relatively fast growth," said Sheng Laiyun, spokesman of the NBS.
Starting this April, the NBS is publishing quarter-on-quarter GDP growth results, a common practice in developed countries, to better reflect economic changes.
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 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.
China has set its GDP target for 2011 at 8 percent.
INFLATION UP BUT CONTROLLABLE
The country's consumer price index (CPI), a main gauge of inflation, rose 5.4 percent in March from a year ago, a 32-month high, said the NBS.
The CPI stood at 5 percent for the first quarter, according to the NBS. The country aims to hold inflation at around 4 percent for the full year.
The producer price index, a major 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.
"Imported inflation has strongly contributed to the domestic price hike," the NBS spokesman said.
Prices of crude oil, iron ore and grains rocketed to the highest in two years in March.
"To contain CPI growth to 5 percent for the quarter is a hard-earned victory amid abundant liquidity globally and widespread inflation in emerging economies," Sheng said.
China's March inflation data was still lower than 6.3 percent for Brazil, 9.5 percent for Russia, he added.
To mop up the excessive liquidity that can stimulate inflation, the country's central bank has raised the reserve requirement ratio for commercial banks nine times since the beginning of last year.
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.
Despite the heightened cooling measures, domestic money supply remained abundant, as the central bank announced on Thursday that the broad money supply, which covers cash in circulation and all deposits, increased 16.6 percent year on year in the first quarter of 2011, up 0.9 percentage points from February.
New yuan loans increased to 679.4 billion yuan in March from 535.6 billion yuan in February.
"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.
Compared to February, consumer prices slightly dropped in March, according to the NBS. "It is a positive sign which shows the government's tightening moves have worked. Inflation can be controlled as long as the government policies are strictly carried out," said Sheng.
Despite year-on-year price hikes, retail sales rose 16.3 percent from a year earlier in the first quarter, compared to 15.8 percent during the first two months, according to the NBS.
Consumer spending, regarded as one of the three engines driving China's economic growth, contributed 60.3 percent of the country's 9,631.1 billion yuan of GDP in the first quarter, according to the NBS. It contributed to about 37 percent of China's 39.8 trillion yuan of GDP last year.