China's GDP Grows at Fastest Pace in 12 Years

China's economy grew at the fastest pace in 12 years in the second quarter and inflation accelerated the most in nearly three, adding pressure on the government to raise interest rates and cool investment.
Gross domestic product expanded 11.9 percent from a year earlier, the statistics bureau said in Beijing today, up from 11.1 percent in the first quarter. Inflation climbed to 4.4 percent in June, breaching the central bank's annual 3 percent target for a fourth month.

``China will continue to strengthen and improve macro- economic controls in the second half of this year,'' the statistics bureau said in today's statement. China's export- fueled growth will probably also fan tension with the U.S. and Europe, which contend that an artificially low yuan unfairly favors its exporters. The figures ``appear to give policy makers little room to delay a lending and deposit rate hike,'' said Martin Haigh, head of Asian sales trading at Cazenove Asia Ltd.,

The central bank is expected to increase the benchmark one- year interest rate from 6.57 percent and the deposit rate from 3.06 percent at least once more this year