GDP growth hits 12-year high in second quarter

China's economy expanded 11.9% year-on-year between April and June, the National Bureau of Statistics announced Thursday. Gross domestic product growth, up from 11.1% in the first quarter, rose at its fastest pace in 12 years with inflation hitting a three-year high of 4.4%. It is the fourth month in a row that inflation has broken the central bank's target of 3%, Bloomberg reported. Urban fixed-asset investment jumped 26.7% in the first half of the year after an increase of 25.3% was posted in the first quarter. The increase has been put down to cash generated by China's rising trade surplus, which came to US$112.5 billion in the first half of the year, up 84% on a year earlier. Economists agreed that Beijing would implement further tightening measures in the second half of the year. A front page commentary in the official China Securities Journal on Thursday morning predicted an interest rate hike and a reduction or abolition of the 20% tax levied on interest income would follow the GDP announcement.