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China records robust Q1 GDP growth

China's GDP grew 10.2 percent in the first quarter of this year on the back of fast-paced trade growth, Chinese President Hu Jintao (胡錦濤) said in a televised speech yesterday.

"The mainland economy maintained good developmental momentum with our GDP in the first quarter rising by 10.2 percent and import and export trade up by 25 percent," Hu said in a meeting with former Chinese Nationalist Party (KMT) chairman Lien Chan (連戰).

China's economy expanded by 9.9 percent last year, including 9.9 percent in the fourth quarter of last year.

"Frankly speaking, we do not hope to pursue extreme high speed [growth], we are paying more attention to the efficiency and quality of development," Hu said.

"We are paying more attention to the transformation of the mode of growth, resource conservation, environmental protection and, more importantly, the improvement of the lives of the people," he said.

The robust first quarter GDP figure comes ahead of Hu's visit to the US this week where a growing US trade deficit that hit US$202 billion last year is likely to be at the top of the talks agenda.

Washington has also become increasingly impatient with Beijing for allegedly seeking to boost exports by keeping the yuan at artificially low levels, and for failing to adequately open its markets and protect intellectual property rights.

Last Tuesday, the commerce ministry announced that China's trade surplus had surged 98.5 percent last month from a year earlier to US$11.19 billion.

The trade surplus for the first three months of the year was up 41.4 percent from the same period last year to US$23.31 billion, it said.

This came on the back of booming foreign trade last month with exports rising 28.3 percent year-on-year to US$78.05 billion and imports growing 21 percent to US$66.86 billion.

First-quarter exports grew 26.6 percent to US$197.3 billion, while imports were up 24.8 percent year-on-year to US$174 billion, the ministry said.

China has not yet released the full range of first-quarter economic statistics including the latest numbers on booming fixed asset investment and growing consumer spending.

"The 10.2 percent GDP growth in the first quarter is realistic because we saw that electricity consumption grew by 11 percent in the first quarter," said Andy Xie (謝國忠), Hong Kong-based chief economist for Asia Pacific for Morgan Stanley.

"China's GDP growth in previous years has been understated substantially so this is a reflection of what is going on," he said.

"China's economy is growing fast and there will be a lot of demand from China," he said.

Last December, China overtook Italy as the world's sixth biggest economy when Beijing said it had massively underestimated the size of its own economy, mainly due to miscalculations in the services sector.

The government found that the domestic economy at the end of 2004 was worth 16.8 percent or US$284 billion more than previously assessed.

By January, China's economy had become the world's fourth biggest, overtaking France and Britain, after the government announced economic growth of 9.9 percent last year.

The growth rate last year followed the revised growth rates of 10.1 percent in 2004 and 10 percent in 2003 that came with the new economic reassessment.

In his annual work report to parliament last month, Premier Wen Jiabao (溫家寶) said the economy would grow by around 8 percent for the year, a forecast widely seen as overly cautious.
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