China's 1st. Quarter Growth Is Great

While western economies are reeling, China’s economy appears to have turned the corner. Its GDP grew 11.9% in the first quarter reversing poor numbers from last year.

I see two themes in today’s reporting.

1) Western economists want China to export some of that growth to the rest of the world by increasing the yuan’s exchange rates. Fat chance.

2) Fears of inflation due to the hyper economy. China, unlike Malaysia and India, has not raised interest rates to cool their economy.

They have kept a lid on credit, however. The government cut the 2010 quota for new bank lending 2.1 trillion yuan to 7.5 trillion.

China is now on track to pass Japan to become the world’s second largest economy.