China’s economy continued its rapid expansion in the first quarter of 2011, growing by 10%.
Inflation jumped to a three-year high in March, despite the government’s efforts to tackle the rising cost of living. Consumer prices jumped over 5% year-on-year, compared to nearly 5% in February, with a 12% hike in food prices the main cause, the National Bureau of Statistics said.
Retail sales figures rose over 16% compared to last year, while demand for oil increased by over 10%, indicating the pace of China’s economic growth.
Chinese Premier Wen Jiabao reassured his country that the government would do everything necessary to rein in the rising cost of living, declaring inflation “the top priority of our economic controls this year and also our most pressing task.”
To keep lending and inflation under control, China’s central bank has once again raised the minimum reserve amount for Chinese banks – the ninth time since the beginning of 2010.
But analyst Wang Jin from Shanghai investment bank Guotai Junan Securities says there is no cause for alarm.
Analysts expect inflation to peak again in June, with further increases in minimum reserve bank ratios and possible interest rate rises, before dropping off later in the year.
Key Statistics – China's Economy (source: CIA World Factbook)
- GDP: $9.87 trillion in 2010, 3rd highest in the world, compared to $8.95 trillion in 2009
- Public Debt: 17.5% of GDP in 2010, 113th highest in the world, compared to 16.9% in 2009
- Labor: world’s largest labor force with 780 million (2010), comprising of agriculture (38.1%), industry (27.8%) and services (34.1%)
- Leading Industries: mining and ore processing, iron, steel, aluminum and other metals, coal