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Chinese Economic Growth Exceeds 10 Percent in First Quarter

  • Heda Bayron

China's fast economic growth shows no sign of letting up.

Higher exports and investments have propelled China's economic growth to 10.2 percent in the first three months of the year.

The National Bureau of Statistics said Thursday industrial production - driven by exports - grew nearly 17 percent in the first quarter. Investments in factories, real estate and other fixed assets continued to pour in, rising nearly 30 percent from the same period last year.

Despite the rapid expansion, the bureau says inflation remains under control at 1.2 percent.

However, officials caution that some difficulties may lie ahead.

Zheng Jingping, spokesman for the National Bureau of Statistics, says the economy faces problems such as rapid growth in fixed-asset investment and bank loans and difficulty in maintaining agricultural growth and increasing farmers' income.

The government has been trying to moderate economic expansion but the new numbers suggest the measures have had little impact.

The government expects the economy to rise 8 percent this year, significantly lower than last year's 9.9 percent.

The latest figures come as Chinese President Hu Jintao prepares to discuss economic issues with President George W. Bush in Washington.

Among the issues of contention between the two large trading partners is China's managed exchange rate system, which the Washington says contributes to its huge trade deficit with Beijing.

The statistics bureau's Zheng Thursday repeated China's position that changing the exchange rate system is not the sole solution to the imbalance.

He says foreign investors and trade partners should understand this and not make a fuss or ask for more measures in their favor.

China ended the yuan's peg to the dollar last year. The yuan has since appreciated some 3 percent against the dollar but the United States wants full foreign exchange liberalization. Many U.S. business leaders and politicians say that by keeping its currency weak, China makes its goods unfairly cheap on world markets.

The U.S. Senate is set to consider a measure to impose high tariffs on Chinese exports if Beijing does not liberalize the currency.

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