Chinese stats Bureau comments on over heating witnessed in china & excessive liquidity .PBOC could go in for another rate hike. All base metal could feel the pressure and Asian indices may take a clue from it.
China's Economy Surges at Faster Than Expected 11.1% on Exports
China's economy grew at a faster than expected 11.1 percent pace, powered by exports that have inflamed trade tensions and increased the risk of overheating.
Spending on factories and real estate accelerated in the first quarter, the statistics bureau said today in Beijing. The median estimate of 24 economists surveyed by Bloomberg News was for growth of 10.4 percent from a year earlier, the same as in the previous quarter.
China's government, concerned the boom may turn to bust, may raise interest rates or allow the yuan to appreciate faster to curb runaway investment in property, factories and the stock market. The China Banking Regulatory Commission today cautioned that a trade surplus that almost doubled to $46.4 billion in the first quarter may trigger a rebound in bad loans.
``China needs to raise the cost of capital -- it's still way too cheap, and that means investment is too strong,'' Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai, said before the release. ``Add asset-price inflation pressures, and you have a recipe that is worrying Beijing again.''
China's benchmark CSI 300 stock index fell 4.7 percent after the announcement, amid speculation that faster than expected growth may prompt a rate increase as soon as today. That's the most since the 9 percent one-day plunge at the end of February that triggered a global equities rout.
Consumer prices climbed 3.3 percent in March versus a central bank target of 3 percent for 2007. That's the highest inflation rate in more than two years.
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China’s soaring economic growth, POWER & MORE POWER
China’s soaring economic growth has been headlined in recent years by a single, attention-grabbing statistic: China each year adds new power generating capacity equal to the UK’s entire electricity grid. But China surpassed this benchmark last year, according to new figures released quietly at the end of January by the China Electric Power News, the mouthpiece of the state industry. The paper reported that new power capacity in 2006 had expanded by 102 gigawatts, or roughly equal to the entire capacity of the UK and Thailand combined, or about twice the generating assets of California, the state with the biggest economy in the US. China expects its installed power generating capacity to grow by around one third to 840 gigawatts by the end of the decade. I don't think you should have any more doubts or any reason to question their GDP numbers.
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