Chinese growth hits six-year high

Many expect Chinese growth to slacken this year

The runaway Chinese economy is showing no signs of slowing down, expanding at an annual 9.9% during the first three months of this year, according to official figures.

The strong growth - China's fastest in six years - was caused by a combination of surging investment and domestic consumption.

But the National Bureau of Statistics warned there were still underlying problems, mainly in the uneven way that wealth is spreading around the country, leading to wide variations in standards of living.

And the pneumonia-like Sars virus was certain to have an impact on growth, although not a large one, the bureau said.

Invest for success

The first-quarter growth figures was well above the government's target of 7% for the year, and exceeds the 8% growth recorded in 2002.

Until recently, policy makers have been concerned that China's high growth was not solidly based in economic activity, representing instead potentially unsustainable growth in demand for consumer goods.

But the bureau now says that fixed asset investment - money poured into infrastructure, factories and homes - was up 27.8% year on year.

Retail sales, meanwhile, rose 9.2%, amid strong sales of cars, homes, appliances and electronics such as mobile phones.

Ups and downs

Many analysts expect Chinese economic growth to slow, as a weak global economy saps demand for China's exports.

The government, too, is expected to rein in the stimulus spending that has underpinned much recent growth.

Sars may not prove big enough to have a noticeable impact on overall Chinese growth.

But it seems to be hitting precisely those eastern seaboard cities that have been the strongest economic performers in the country's recent boom.