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Healthy figures for China's Jan-Feb growth

CHINA'S economy grew more bullish in February, with rising industrial production, steady investment, robust retail sales and surging trade. But new loans fell sharply while prices rose more than expected to a 16-month high.

Government officials dispelled worries that China's economy is overheating, while analysts said the country should consider halting stimulus measures and prepare for tighter policies to prevent overheating.

"China's economy is healthy, not overheating," said Sheng Laiyun, a spokesman of the National Bureau of Statistics today. "Some economic indicators are growing fast indeed, but it is on a low comparative base last year. To grow at this pace shows the foundation of China's recovery has been more solid than before."

China's industrial production rose 20.7 percent from a year earlier in the first two months, up 16.9 percentage points from the same period last year and 2.2 percentage points from December, the National Bureau of Statistics said today.

The bureau did not provide monthly figures for the first two months due to the Spring Festival holiday.

Urban fixed-asset investment jumped 26.6 percent annually to 1.3 trillion yuan (US$190.3 billion) in January-February, compared with an increase of 26.5 percent a year ago. The investment in property development gained 31.1 percent to 314.4 billion yuan.

Retail sales, a yardstick of domestic demand and consumption, advanced 17.9 percent year on year in the first two months to 2.5 trillion yuan, 2.7 percent faster than a year earlier.

With the effects of economic changes fading in the coming months, Sheng said China's statistics would look more normal.

However, excluding the influence of a low comparative base, China's consumer prices and producer prices had an unexpectedly fast growth in February, feeding inflation expectation.

China's Consumer Price Index, a main gauge of inflation, jumped 2.7 percent from a year earlier last month, up from an increase of 1.5 percent in January.

The Producer Price Index, which measures factory-gate inflation, climbed 5.4 percent year on year, the highest since November of 2008 and compared with a 4.3 percent rise in January. The index is considered a harbinger for consumer prices because the cost rise in factories trickles down to shoppers.


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