China does it again, and at a faster rate...

The Chinese economy is continuing to grow at a rapid pace but with concerns about overheating. Financial Times reports:

The Chinese economy expanded at an accelerated rate of 11.9 per cent in the first quarter. The economy grew at the fastest rate in nearly three years and more quickly than economists had expected. The pace of growth puts new pressure on Beijing to consider tougher tightening measures, including appreciating the exchange rate and increasing interest rates.

House prices increased by 11.7% over the past 12 months - the fastest rate since the figures were first published five years ago and prompting new concerns about a potential bubble in the property market.

Despite rising fears of overheating, consumer price inflation dipped to 2.4 per cent last month, from 2.7 per cent in February. However, factory-gate inflation continued to accelerate, increasing from 5.4 per cent to 5.9 per cent in March.

The government has already taken some steps to reduce the stimulus it is injecting into the economy, including much tighter control over bank lending in March. However, domestic concerns about potential inflation come at a time of growing international pressure to abandon China’s de facto currency peg against the US dollar.