During the first quarter, China's gross domestic product expanded 11.9% compared with the same period last year, potentially pressuring policymakers to act to cool off the economy and slow inflation. The increase marked the fastest growth rate in nearly three years. Meanwhile, data were released showing that housing prices have risen 11.7% during the past 12 months. "In the absence of a dramatic fall in external demand, it is critical for the government to tighten policy more decisively than they have been doing in order to prevent overheating," Yu Song and Helen Qiao of Goldman Sachs said in a report to clients.
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