China’s economy grew faster than expected, at 6.9%, in the first quarter as higher government infrastructure spending and a property boom helped boost industrial output by the most in over two years. March investment, retail sales and exports also beat forecasts, suggesting good momentum. However, according to Reuters, most analysts worry Beijing is still relying too heavily on stimulus and “old economy” growth drivers, primarily the steel industry and a property market that is overheating. “The Chinese government has a tendency to rely on infrastructure development to sustain growth,” economists at ANZ said in a note. “The question is whether this investment-led model is sustainable.” Even as top officials vowed to crack down on debt risks, China’s total social financing reached a record 6.93 trillion yuan ($1 trillion) in the quarter – roughly equivalent to the size of Mexico’s economy. Spending by the central and local governments rose 21% from a year earlier.
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