China's GDP Growth

Turns out that the astonishing estimates I showed you the other day of China's economic growth were... well, not astonishing enough.

China's Economy Surges at Faster-Than-Forecast 11.1%

April 19 (Bloomberg) -- China's economy grew at a faster- than-forecast 11.1 percent pace in the first quarter from a year earlier, raising the likelihood the government will increase interest rates to curb the risk of overheating.

Growth accelerated from 10.4 percent in the previous quarter, the statistics bureau said in Beijing today. China's benchmark stock index fell 4.7 percent before the release, triggering declines in Asian and European shares, on speculation borrowing costs will rise.

Premier Wen Jiabao said the government will take steps to curb lending and investment in factories and property and rein in the record trade surplus. Inflation accelerated to 3.3 percent, the fastest pace in more than two years, and breached the central bank's 3 percent target for the year.

"Growth has been driven by continuing strength in investment and continuing strength in politically sensitive exports," said Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong. "China needs to cool profits and the easiest way to do that would be to allow the yuan to appreciate at a faster rate."

Red hot? Yellow hot? White hot? I'm not sure exactly what the appropriate temperature description for China's economy is, but it's clear that it is growing really, really fast, even for China. The potential implications for China's monetary policy are clear. And the fear that China's central bank might have to take steps to cool down the economy provoked a continent-wide selloff in stocks today, as Reuters reports:

SINGAPORE (Reuters) -- Asian shares fell sharply on Thursday as investors worried that Chinese economic data could show an overheating economy and prompt Beijing to announce more interest-rate hikes or other growth-cooling measures.

...China stocks fell 3.3 percent in Shanghai as investors worried that strong data could lead to more government measures to reign in the booming economy.

Yes, there can be too much of a good thing...