Tough decisions better sooner rather than later
China has posted another set of economic data that would be the envy of any government - a high growth rate, relatively low inflation and an impressive increase in the amount of investment.
As good as the figures would be to other nations, however, such numbers are not a matter for comparison. There is no historical context with which to judge the mainland's growth and the spectre of an overheating economy is ever-present.
This has long been realised by China's economists and, as the inflation rate of 2.8 per cent shows, they are treading wisely. Yet there are also indications that the government could do much better in cooling some sectors.
Quarterly data released on Tuesday put gross domestic product at 9.5 per cent, half a percentage point higher than expectations and 1.5 points above the government's target for the year.
The latest rise in the consumer price index, the key indicator of inflation, was 2.5 percentage points less than the high of 5.3 per cent last August, and inflation is predicted to fall to 2.6 per cent in coming months. The government wants to ensure it does not exceed 4 per cent.
In other key indicators, fixed-asset investment grew 22 per cent year on year, industrial output rose 16.2 per cent and retail sales were up 13.7 per cent.
Per-capita disposable income increased 11 per cent in urban areas and the income of rural residents rose 16 per cent.
To prove that the government is far from complacent, Premier Wen Jiabao responded by announcing yet another in a string of measures to cool the economy - controls on fixed-asset investment to curb runaway growth in the steel industry.
Last October, the first interest rate rise in nine years lifted the benchmark lending rate 0.27 per cent to 5.58 per cent. Other steps have ranged from enforced holidays to shutting down electricity supplies.
But while a clear effect has been seen in some sectors of the economy, such as in car-making, others, such as the property market, are still running hot.
Soaring investment, whether for productive means or not, is causing shortages of electricity. Oil, gas and coal are in short supply and continually rising in price.
Staving off inflation is never easy for a government, especially one with so many factors to keep in check. Even now, the United States is trying to complicate equations by threatening tariffs to counter a trade imbalance. Such problems will not go away quickly, so more decisive measures have to be taken.
Interest rates are still too low and raising them significantly would resolve concerns over the property bubble. The vexing question of the value of the yuan also has to be dealt with. Mainland officials are considering these and other issues. They must act sooner rather than later to avoid China's economy getting too hot.