BEIJING: China's economy picked up even more speed in the second quarter, reaching a dizzying 10.9% growth rate likely to trigger tighter controls to slow things down, state media said yesterday.

The figure, published by the official Securities Times without giving sources, compares with 10.3% year-on-year growth in the first quarter of 2006. In all of 2005, the economy had expanded by 9.9%.

“The central bank will not turn a blind eye to such high economic growth rates and inflation trends of this magnitude,” the newspaper said, citing unnamed analysts.

“Tightening measures are imminent and calls for an interest rate hike are mounting again,” it added.

The growth figure could not be confirmed by the National Bureau of Statistics, the department in charge of releasing the official data, which is expected to be formally released next week.

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Workers walking past a construction site in Beijing on Thursday. - APpic

The government has targeted 8% growth for 2006 but analysts said that objective had been rendered entirely unrealistic by the performance of the past months.

“Now it looks likely the fourth quarter growth rate could reach 11%,” said Gao Shanwen, a Shanghai-based economist with Everbright Securities.

The report followed an announcement late Wednesday by the National Development and Reform Commission, the top planner, saying the economy would grow 10.4% in the first half and 10.2% in the full-year.

“The central government should follow a stringent monetary policy to prevent over-investment by local governments, the rapid growth of money supply and (bank) lending, over-production in some industries like steel, cement and aluminium, and soaring house prices in certain regions,” the commission said, according to an official Xinhua news agency report.

Other figures given yesterday showed industrial output rose 19.5% in June, up from 17.9% in May, while fixed asset investment jumped 35%, up sharply from May's already very high and rising rate of 30.3%.

The Securities Times also said the June consumer price index, the benchmark inflation indicator, rose 1.5% year-on-year after a 1.4% rise in May. Despite the increase, the inflation rate remains very low by any standard given the fast overall expansion