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Chinese economic boom continues

Chinese economic boom continues
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China’s economy continued to boom at the start of this year according to the latest figures from the National Bureau of Statistics in Beijing.

But a government spokesman said the economic recovery still faces a lot of “difficulties and problems.”

Annual growth was an unexpectedly strong 11.9 percent in the first quarter, much better than the 10.7 percent in the final three months of last year.

But Nomura China economist Mingchun Sun pointed out things were bad at the start of 2009: “We have a very low base, you know, in Q1 last year we had 6.1% GDP growth, which was the trough of this economic cycle. That exaggerated the growth numbers of this quarter.”

Chinese factory output grew 18.1 percent in the first quarter, from a year earlier, as did retail sales, and investment in things like roads and factories rose 26.4 percent.

The imbalance of trade between China and the US has Washington calling for Beijing to allow it’s currency to strengthen, but economist Mingchun Sun does not believe that will happen soon.

He said: “All of us know that the reason why the Chinese government hasn’t moved yet is because it doesn’t want to do this, being viewed as bowing to US pressure.”

But China’s Commerce Ministry promptly reaffirmed its opposition to a stronger yuan and said Washington is wrong to argue that, by holding down the currency, Beijing gives Chinese exporters an unfair competitive edge.

The latest figures caused economists to raise their growth forecasts for China. Many expect that this year it will overtake Japan to become the world’s second biggest economy after the US.