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Journalism of Courage
China reported last Thursday that economic growth accelerated in the first quarter to a sizzling rate of 11.1 percent, heightening concerns that the world8217;s fourth-largest economy is expanding too fast.
The larger-than-expected growth rate will almost certainly prompt China8217;s central government to hit the brakes harder. Beijing is expected to further raise interest rates and bank reserve requirements, in an effort to rein in lending and investments that have built new factories, boosted production and inflated the prices of property and stocks.
Some analysts also predicted that policymakers would let China8217;s currency appreciate at a faster pace. A stronger yuan could help reduce the nation8217;s massive trade surplus by making Chinese goods more expensive for overseas buyers.
In announcing the first-quarter economic statistics, a spokesman for the National Bureau of Statistics acknowledged the economy8217;s increased risk of overheating, a term that describes conditions of excessive demand or investment that can generate inflation or 8216;8216;bubbles8217;8217; in property and equity markets.
After the release of the data, China8217;s State Council, or cabinet, said that it would strengthen efforts to curb new investments and steer a course toward sound growth.
8216;8216;An overheated economy may not cause big problems in the short term, but it is unsustainable and harmful for stable development,8217;8217; said Zuo Xiaolei, chief economist at China Galaxy Securities Co. Ltd in Beijing.
