CHINA: China's GDP soars 11.9% in Q1
15.04.2010, 17:13China's economy expanded at full swing in Q1, surging 11.9% year-on-year, according to the National Bureau of Statistics (NBS).
The rapid growth was mainly driven by investment, as the NBS said capital formation, which includes fixed asset investment and inventory, contributed 58%, or 6.9 percentage points (ppt), of the 11.9% growth. Final consumption also played a very active role, contributing 52% of the growth pace, or 6.2 ppt. But net export, or the balance of export and import, was a negative factor, dragging down GDP by 1.2 ppt
(-10%).
Even considering the fast expansion, the NBS does not think the macro economy is overheated, because the low comparison basis owing to the freezing economy in Q1 2009 made the y-o-y growth this year somewhat exaggerated. Moreover, the national data office said that China's big- and medium-sized manufacturers utilised an average of 81% of their capacity, which was still a normal indicator.
Meanwhile, consumer inflation cooled mildly from 2.7% year-on-year rate in February to 2.4% in March. Therefore, the NBS suggested that China should go on with its stimulus measures, but at the same time, make the measures more "flexible".
Besides, China's Ministry of Commerce said foreign investors remained interested in the Chinese market, as foreign direct investment (FDI) inflow rose 12% year-on-year to USD 9.4bn in March. In Q1, FDI increased by 8% to USD 23bn.