The expansion in the Chinese economy, with annual growth up from 9.9 per cent in the final quarter of last year, is likely to heighten US calls for a revaluation of the country's currency, the renminbi. Mr Hu is due to visit Washington this week, where officials have previously complained that China's currency has been kept artificially weak to boost the country's exporting performance.
Although the Chinese government cut the renminbi's peg to the US dollar last summer, the currency has appreciated just 1.1 per cent. Earlier this month, the US President George Bush urged the Chinese to "make a statement" on the currency, amid concerns about the American trade deficit with China, which hit a record high of $201.6bn (£115bn) last year.
China has also come under pressure over fears that economic expansion is damaging the environment and failing to improve the lives of large chunks of the population in rural areas.
Yesterday, Mr Hu said his government was not seeking growth at any cost. "We do not want to pursue excessively rapid economic growth," he said. "What we are seeking is efficiency and quality of development."
Export growth, the commodities boom and foreign investment in the country has enabled the Chinese to embark on huge infrastructure schemes such as the Three Gorges Dam on the Yangtze river, which will be the world's largest hydro-electric project when it is completed in 2009. The country is also spending the equivalent of £22bn in preparation for 2008 when Beijing hosts the Olympic Games. Mr Hu added: "We are concerned about saving our resources, environmental protection and the improvement of our people's livelihood."
Tai Hiu, an economist at Standard Chartered Bank, said there was already some evidence that China was attempting to manage growth, with checks on investment introduced in certain industries since 2004, though the policy had enjoyed only limited success.
"The difficulty for the Government is how to slow investment and credit without checking overall growth," he said. "Over the past two years we have seen measures that have sometimes been ineffective or that have had to be reversed after a brief period."
The Chinese vice finance minister Lou Jiwei announced yesterday the government planned to begin auctioning off mining rightsto increase the revenues the country earns from commodities exploration.
Currently, the Government awards exploration contracts, rather than auctioning them to the highest bidder, but new discoveries of oil, coal and minerals have failed to keep pace with demand.Reuse content