News / Asia

China's Economic Growth Surges

China's economy grew at a strong pace in the first quarter of this year, but financial experts warn that the world's third-largest economy may be on the verge of overheating.

China's economic growth rate surged to 11.9 percent for the first quarter of this year. The government also reports that the inflation rate was 2.2 percent, which is lower than the government's target.

The economic expansion this quarter is nearly double that of the same period last year.

Li Xiaochao, with the National Bureau of Statistics, said Thursday the government is so far pleased with results.

Li says the government believes the figures show that the measures it is taking to respond to the global financial crisis are "correct and effective."

Despite the strong numbers, Li said there are still many uncertainties that could hurt economic growth.

Li said China faces many challenges - such as a drought in the southwest, constraints on farmers' income and high prices for industrial goods, which could affect efforts to meet the target of eight percent growth for the whole year.

Stephen Green, the senior China financial analyst for Standard Chartered Bank in Shanghai, warns that the results hint at possible problems for the Chinese economy in the near future.

"Yeah, we think it's signaling strong growth. The economy shows signs of overheating," he said.  "The government has already withdrawn some of its stimulus measures. It probably needs to do a little bit more, although there is a huge debate about that in Beijing at the moment."

An economy that expands too rapidly, or overheats, can experience price inflation and see costs for assets such as real estate and stocks rise to unsustainable levels. In China, inflation is a particular concern because much of the population still lives on a less than $1,000 a year, and rapidly rising food and housing costs could spark protests.

At a meeting Wednesday, China's cabinet reviewed the data and said the country would stick to its "appropriately loose" monetary stance and the active fiscal policy adopted at the height of the global financial crisis in late 2008.

However, also Wednesday, the government said housing prices are rising too fast, and Beijing cannot ignore what it described as the growing monetary and fiscal policy risks.

The latest data show China is on its way to overtake Japan as the world's second largest economy, behind the United States. China's gross domestic product last year was $4.9 trillion, just behind Japan's $5.1 trillion.

You May Like

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid