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Sunday 18th of July 2010
April 15, 2010    

China’s economic growth surges ahead

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by Kay Murchie
China's economic growth surges ahead

China’s economy, which is the world’s third largest, expanded at an annualised rate of 11.9% in the first three months of the year.

The news comes just a day after the Trade and Industry Ministry announced that Singapore’s economy saw first quarter annualised growth of 32.1% – compared with a 2.8% fall in the previous quarter.

Growth in both economies has been driven by manufacturing activity and the figures come just a few months after the International Monetary Fund said Asia will lead the way in the global recovery.

Li Xiaochao of the National Bureau of Statistics told reporters: “We have got off to a good start this year.

“The momentum of national economic recovery has further expanded, which has laid a good foundation for reaching the targets set for the whole year,” he added.

However, there are concerns of China’s economy overheating and pressure is mounting on the country’s central bank to hike interest rates and loosen currency controls.

Economists have cautioned that the economy is expanding too quickly and are urging for the yuan to appreciate, in order to help slow the economy.

China has been under pressure from the US to allow the Chinese currency to find its own level in order to ease inflation.

China, however, has told President Barack Obama that it is committed to yuan reform but will not be pressurised into making changes to its currency peg.

Keeping the yuan stable is “an important contribution” to global recovery said China last month.

US legislators and trade groups say the yuan, which is also referred to as the renminbi, is kept up to 40% below what its value should be against the US dollar.

The Chinese currency pegged the US dollar until 2005 when it was allowed to rise in value by about one fifth.

The peg was reinstated in July 2008 when the global financial crisis took hold, amid US concerns of the impact on trade.

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