Beijing - Pressure grew on Beijing to raise interest rates and loosen currency controls Thursday after official data showed the economy grew at a red-hot 11.9% in the first three months of the year.
The figure represents a second successive quarter of double-digit growth for the world's third-largest economy as it extends its recovery from a slowdown caused by the global slump.
"We have got off to a good start this year," Li Xiaochao, spokesperson for the National Bureau of Statistics, told reporters.
"The momentum of national economic recovery has further expanded, which has laid a good foundation for reaching the targets set for the whole year."
The increase was the largest since the onset of the global downturn and well above Beijing's target of eight percent for the year, which is seen as crucial in creating enough jobs to stave off social unrest.
But analysts warned that the data showed the economy was growing too fast and policymakers needed to raise interest rates and let the yuan appreciate to avert the risk of running out of control.
"The economy is a little bit too hot. I think policy needs to be tightened more aggressively to prevent overheating," Ben Simpfendorfer, an economist at Royal Bank of Scotland in Hong Kong, told AFP.
"I think residential investment was a big driver of growth in the first quarter. Running an economy on residential investment is not sustainable."
Property prices in major cities rose at the fastest pace in nearly five years in March, official data showed Wednesday.
Beijing has been trying to cool the property market and calm inflationary pressures by clamping down on bank lending amid fears of damaging bubbles in the sector, bad debts and the threat of economic overheating.
Policymakers have raised bank reserve ratios twice this year - effectively limiting the amount of money banks can lend - and increased interest rates on benchmarket three-month and one-year Treasury bills.
Analysts have forecast interest rate hikes as early as this month as well a loosening of the nation's exchange rate policy, which has effectively pegged the yuan to the dollar since mid-2008.
The nation's closely watched consumer price index, the main gauge of inflation, rose 2.2% in the first quarter compared with the same period a year earlier, the statistics bureau said.
In March alone, consumer prices rose 2.4% from a year ago.
However, the increase was slower than in February when consumer prices rose 2.7%, which was likely due to the Chinese Lunar New Year holiday inflating prices.
It was below the government's inflation target of three percent for the year.
"We still have a lot of difficulties and pressure in meeting this target but I still believe that the target is within reach," Li said.
Retail sales jumped 17.9% in the January-March period, while fixed asset investments, a measure of government spending on infrastructure and a key driver of the economy, jumped 25.6% year on year.
Industrial output from the country's millions of factories and workshops rose 19.6%.
- AFP