China's Economy Continues to Ascend – But Watch Out for Speed Bumps

Everyone knows that China's economy is hot. The only question is whether it may be a little too hot. China posted yet another quarter of stellar economic growth in the first quarter of 2011, with its gross domestic product (GDP) growing 9.7%. However, analysts are worried about some of the side effects that have accompanied that growth- namely soaring inflation and the emergence of speculative bubbles. Inflation in China hit a 32-month high in March, and the country's real estate market is beyond scorching. Policymakers in Beijing insist they have the situation under control, and they've been trying to rein in liquidity and curb speculation to prove it. That's why China's economy, accustomed to double-digit growth, is only expected to grow 8% to 9% this year.