The National Bureau of Statistics (NBS) released its report on China's first-quarter economic performance on April 18, amid similar forecasts by major research institutions such as the Chinese Academy of Social Sciences and the State Information Center. According to the NBS figures, the nation's GDP in the first quarter rose 11.1 percent, fixed asset investment grew 23.7 percent, and retail sales increased 14.9 percent. The total trade volume climbed to $458 billion during this period, up 23.3 percent, although the trade surplus fell noticeably to a surprising $6.9 billion in March, down by almost 40 percent from a year ago.

Accompanying these upbeat economic indices is a general feeling of optimism among local businesses and the public at large. This has been proved by the following two phenomena. One is the entrepreneurial confidence index, which exceeded 142, the highest ever in recent years, according to a NBS survey of 19,500 companies ranging from mining and manufacturing to social services and the IT industry. The other is the bullish local stock market and the ever-increasing large turnover. The combined transaction volume of the latter was an awesome 7,321.7 billion yuan ($950 billion) by the end of the quarter, one of the largest ever recorded in the history of the Chinese stock market.

This optimism has been echoed in academic circles, as a great majority of Chinese economists believe that given the growing income for both households and enterprises, greater consumption and improved investment structures, the economy is developing at a generally healthy pace. They say as long as macro-control measures are duly taken against any negative tendencies, China is very likely to maintain its present development momentum throughout 2007.

Some scholars, however, do suspect that there remain elements of an overheating in the economy, citing a rising consumer price index, escalating costs for raw materials, credit expansion and surging trade surplus, especially in the first two months of this year. Yet they all agree that, with the central authorities' contraction policies being implemented in recent months, such as raising the interest and benchmark rates for deposits and loans in succession, and with more such measures to follow, the latent risky factors are not a threat.

But they also warn that, in the longer term, a number of problems require the attention of the government, such as unemployment, income disparity, worsening environment, restraints on resources, and an unbalanced economic structure that relies too heavily on investment and exports rather than domestic consumption.

On the same day NBS disclosed its statistics, Premier Wen Jiabao chaired a meeting of the State Council, China's cabinet, to discuss the economic development of the first quarter. While describing the overall economic situation as booming and positive, those present also reiterated the tasks laid down at both an economic working conference of the ruling Chinese Communist Party last December and the fifth Session of the 10th National People's Congress in March this year: focusing on structural readjustment and transforming the growth pattern, emphasizing the conservation of resources and environmental protection, pushing for reforms and innovation, and attaching greater importance to people's livelihood and social undertakings. With such measures in place during 2007 and beyond, the call for optimism seems well founded.