Beijing: China's robust economy slowed only slightly in the first quarter despite global gloom, while inflation stayed above 8 per cent in March, the government said Wednesday, adding to pressure to rein in prices that are battering Chinese consumers.
The world's fourth-largest economy expanded by a still impressive 10.6 per cent in January-March from a year earlier, down from the previous quarter's 11.2 per cent rate, amid weaker global demand for exports and government steps to cool an investment boom.
Consumer prices rose 8.3 per cent in March over the same month last year, down only slightly from February's 8.7 per cent, the highest rate in nearly 12 years, according to the National Bureau of Statistics.
The price spike that began in mid-2007 has been blamed on shortages of pork, grain and other food. The government is trying to increase output by raising farm subsidies and curbing exports, but that effort was hampered by snowstorms in January and February that wrecked crops.
''Consumer price inflation this year is still running at a high level,'' said Li Xiaochao, a bureau spokesman, at a news conference. ''We need to further enhance agricultural production and pay attention to production of grain and pigs.''
Beijing also will ''adopt sound fiscal policies and tight monetary policies,'' he said. ''It will create a favorable environment for curbing inflation.''
Taming inflation is the government's top priority, says Premier Wen Jiabao, the country's top economic official.
Communist authorities worry about a possible public backlash if prices keep rising rapidly. Bouts of high inflation in the 1980s and '90s sparked protests _ an embarrassment that Chinese leaders want to avoid ahead of this summer's Beijing Olympics, which is meant to showcase the country as prosperous and stable.
Analysts expect inflation to stay high as late as May before it subsides.
March inflation was well above the 4.8 per cent target that Wen has set for this year. Li, the statistics bureau spokesman, said that to meet Wen's target, inflation has to fall below 4.2 per cent each month for the rest of the year.
On the broader economic front, Li noted that while export growth is slowing, the economy appears to be weathering the US credit crisis and weaker global demand for Chinese goods.
Beijing has raised interest rates repeatedly and tried to curb spending on real estate, factories and other assets to cool an investment boom that is driving growth. Regulators worry that runaway spending could ignite a financial crisis.
''The Chinese economy in the first part of this year continued to maintain steady fast and sound development,'' said Li. ‘‘The slowdown in economic growth is really in response to the micro control policies”.
Total economic output in the January-March period was 6.1 trillion Yuan (US$880 billion; 550 billion), according to the bureau.
That brought China closer to overtaking Germany as the world's third-largest economy.
That is expected to happen this year, though the status will be largely symbolic. China, with more than 1.3 billion people, is still far poorer on a per capital basis.
Despite government curbs, spending on real estate and other fixed urban assets grew by 24.6 percent in the first quarter, the Statistics Bureau said. That was up 0.9 percentage points from the rate of the same period last year.
China's economy grew by 11.9 per cent in 2007, but analysts expect that to fall as low as 9 percent this year. By contrast, Germany's 2007 growth rate was 2.5 per cent.
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