Overheating concerns

16:36, April 13, 2010      

Email | Print | Subscribe | Comments | Forum 

Amid optimistic forecasts that the Chinese economy may have expanded by more than 11 percent in the first quarter, policymakers will most certainly take comfort in the country's growth figures that are scheduled for release later this week.

While the country's trade surplus shrank by about 80 percent over the same period last year, a double-digit GDP growth indicates that the country's fixed-asset investment and domestic consumption have together generated even more growth momentum in the first quarter of this year than they did in previous quarters, when the country was going all out to fight the worst global recession in decades.

By tapping into the huge potential of its domestic demand, China is well poised to sustain its stronger-than-expected economic recovery.

However, while the current consumer price index may not point to imminent inflation, policymakers should be aware of the looming perils of rapid growth.

The country's consumer inflation remained as mild as below 3 percent in the past quarter, estimates showed. But such a "so far, so good" consumer price level is not enough to calm growing concerns about overheating.

According to customs figures, the rise of prices has played a much bigger role than the increase in the volume of imports of raw materials in accelerating China's import growth in March, resulting in the first monthly trade deficit in the past 70 months.

Under such circumstances, a domestic investment boom will likely fuel more imported inflation to choke the country's sustainable growth.

First quarter growth figures may look well, but that only proves the success of the country's previous stimulus package. What China and the world economy need is a successful exit strategy.

Source: China Daily

(Editor:黄硕)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 26, a resident passes by a flower terrace decorated for the coming National Day. (Xinhua/Hang Xingwei)
  • The photo, taken on Sept. 26, shows the SWAT team ready for the joint exercise. (Xinhua/Wangkai)
  • Two metro trains in Shanghai collided Tuesday afternoon, and an identified number of passengers were injured in the accident, the Shanghai-based eastday.com reported. Equipment failures were believed to have caused the crash on the Line 10 subway, Xinhua quoted local subway operator as saying.
  • An employee at a gold store in Yiwu, located in east China's Zhejiang province, shows gold jewelry on Monday.(Xinhua/Zhang Jiancheng)
  • Tourists ride camels near China's largest desert lake Hongjiannao in Yulin, north China's Shaanx Province, Sept. 24, 2011. Hongjiannao is shrinking as a result of climate change and human activities, and may vanish in a few decades. Its lake area, which measured more than 6,700 hectares in 1996, has shrunk to 4,180 hectares. Its water level is declining by 20-30 centimeters annually and its water PH value has risen to 9.0-9.42 from 7.4-7.8. (Xinhua/Liu Yu)
  • Actors perform royal dance at the Gyeongbok Palace in Seoul, Sept. 27, 2011. A ceremony commemorating the 38th South Korea Sightseeing Day was held in Gyeongbok Palace on Tuesday. (Xinhua/He Lulu)
Hot Forum Discussion