China's rapid growth causing concern

China's economy has seen another quarter of rapid growth with GDP up 9.7%, which is adding fuel to fears of unstable overheating.

Economists are anxious that unchecked growth could topple over into a slump, with an effect on the rest of Asia.

The growth in Asia's second-largest economy was fueled by spending on new plant and equipment in the first three months, with investment in fixed assets surging by 43%, according to the National Bureau of Statistics.

The 9.7% economic growth figure for the first three months of 2004 compared with a 9.9% expansion in the fourth quarter of last year and 9.1% for all 2003. Factory output was 19% higher in March than a year earlier, and exports were 43% higher.

A spokesman for the bureau said the economy had kept the momentum of fast growth since early 2004 but acknowledged there were problems with the scale of investment in fixed assets is too large and growth is too fast.

The Chinese government has moved to play down such fears. In particular, it has sought to calm bank lending, the source of much speculative financing, especially in the property sector.