China's construction industry continues to boom

The latest figures show the Chinese economy was 9.5% bigger at the end of March than a year earlier.

The expansion matches the wildfire pace of 2004, and remains well ahead of the official target of 8%.

The government has been clamping down on both consumer and business credit, but now says it needs even tighter controls on investment.

China has now been growing at an annual rate of more than 9% since the start of 2003.

Bubble fears

China's rapid economic growth has been accompanied by a surge in exports, up 35% from a year earlier.

Investment in fixed assets is still overheated Zheng Jingping, National Bureau of Statistics

It has also helped drive world prices for oil and other commodities sharply higher.

Massive investment by China's industries, up 23% over the year, has led the growth, but this growth is also sparking fears that the economy could overheat amid a speculative leap in property values.

The construction industry is one of the main focuses for investors, with luxury apartment blocks shooting up across China's big cities.

"Investment in fixed assets is still overheated," said Zheng Jingping, a spokesman for the National Bureau of Statistics.

China needed to start thinking about new ways of constraining the building trade, he warned - perhaps with property taxes or transaction fees.

In an attempt to cool investment fever, the government has imposed curbs on bank lending, tightened planning laws and banned some new enterprises, particularly in the property and metals sectors.

But the continued rate of expansion - and the risk of inflation - could mean a rise in interest rates, which the People's Bank of China raised in October for the first time in nine years.