The figure represents a second successive quarter of double-digit growth for the world's third-largest economy as it extends its recovery from a slowdown caused by the global slump.

But an easing in the consumer price index, the main gauge of inflation, could complicate the timing of a move on rates and the currency, analysts said.

"We have got off to a good start this year," Li Xiaochao, spokesman for the National Bureau of Statistics, told reporters.

"The momentum of national economic recovery has further expanded, which has laid a good foundation for reaching the targets set for the whole year."

The increase in economic growth was the largest since the onset of the global downturn and well above Beijing's target of eight percent for the year, which is seen as crucial in creating enough jobs to stave off social unrest.

But analysts warned that the data showed the economy was growing too fast and policymakers needed to raise rates and let the yuan appreciate to avert the risk of running out of control.

"The economy is a little bit too hot. I think policy needs to be tightened more aggressively to prevent overheating," Ben Simpfendorfer, an economist at Royal Bank of Scotland in Hong Kong, told AFP.

"Residential investment was a big driver of growth in the first quarter. Running an economy on residential investment is not sustainable."

While new loans issued by Chinese banks fell to 510.7 billion yuan (74.8 billion dollars) in March, property prices rose at the fastest pace in nearly five years, data showed this week.

The figures prompted the State Council, or cabinet, Wednesday to renew earlier promises to step up efforts to rein in prices by curbing speculative purchases and increasing land supply for construction.

Beijing has been trying to cool the property market and calm inflationary pressures by clamping down on lending fearing damaging bubbles in the sector, bad debts and the threat of economic overheating.

Policymakers have raised bank reserve ratios twice this year -- effectively limiting the amount banks can lend -- and increased interest rates on benchmark three-month and one-year Treasury bills.

Analysts have forecast interest rate hikes as early as this month as well a loosening of exchange rate policy, which has effectively pegged the yuan to the dollar since mid-2008.

Pressure is mounting on Beijing for a stronger currency, which critics say gives Chinese manufacturers an unfair advantage by making their exports cheaper.

US President Barack Obama told President Hu Jintao this week the yuan was "undervalued" and US lawmakers have been pushing for China to be labelled a "currency manipulator", but Beijing said it will not bow to foreign pressure.

However, the timing of such a move is less clear as the consumer price index rose just 2.4 percent in March, lower than February's 2.7 percent and below the government's inflation target of three percent for the year.

The lower inflation reading could persuade the central bank to delay an rate hike and a loosening of the currency policy, said Brian Jackson, a senior analyst at Royal Bank of Canada in Hong Kong.

Although "the case for policy tightening remains intact given the risks of China's economy overheating", he added.

Retail sales jumped 17.9 percent in the January-March period, while fixed asset investments, a measure of government spending on infrastructure, jumped 25.6 percent year on year.

Industrial output from the country's millions of factories and workshops rose 19.6 percent.

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