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China's Economy Grows Nearly 12 Percent in Second Quarter


China's Bureau of Statistics says the economy grew nearly 12 percent in the second quarter. The news comes just a day after a parliamentary committee warned that there was danger of the economy overheating. Daniel Schearf reports from Beijing.

The 11.9 percent increase between April and June was China's highest quarterly growth rate in years.

China's central bank has increased the amount of cash banks must hold in reserve and raised interest rates in order to curb excessive lending. But despite these moves, the statistics bureau says investment climbed by about 26 percent in the first half of this year.

Li Xiaochao, spokesman for the bureau, says the government will do more to curb lending and cool investment, but he says inflation is a major concern.

"Recognizing excessive liquidity is still outstanding and housing prices are still going up…there is still the potential risk of igniting another round of high price rises," said Li. "Pressure on consumer prices is rather big."

Food prices are continuing to rise, a particular worry for the government. The statistics bureau says the consumer price index, a key inflation indicator, was up 4.4 percent in June.

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