The booming Communist giant's Gross Domestic Product (GDP) reached USD 1.39 trillion in the first half, with growth rate 0.5 percentage points higher than the same period last year.

China's GDP rose 11.5 per cent during January-June period after it grew 11.9 per cent in the second quarter.

The growth rate is much faster than the planned eight per cent growth by the government in March this year.

"The much faster-than-expected pace lifted China's first half growth to 11.5 per cent, as inflation picked up sharply to a worrying 4.4 per cent in June," the National Bureau of Statistics spokesman Li Xiaochao said here.

At this rate coutry's GDP is expected to overtake

Germany as the world's third largest by the end of this year.

"Economic development in China had remained stable and fast since the beginning of this year, and the accelerated growth was mainly fuelled by exports coupled with changes in domestic consumption," Li said.

Consumption has caught up as retail sales grew 15.4 per cent in the first half this year. Fixed assets investment rose 25.9 per cent, which is down by 3.9 percentage points.

During first half, the primary sector posted a growth rate of 4 per cent; secondary sector 13.6 per cent and tertiary sector recorded an increase of 10.6 per cent.

However the government is worried that runaway spending could ignite high inflation and lead to social instability.

Price hike for foodstuff mainly grain, meat and eggs contributed significantly to the rise of China's Consumer Price Index (CPI) in the first half of this year, Li said.

High inflation helped jack up CPI for the first half of this year by 3.2 per cent than the same period last year.

Li noted foodstuff prices contributed 2.5 percentage points to the CPI rise in the January-June period.

China exported USD 112.5 billion more than it imported in the first six months, an increase of 84 per cent from a previous year.

That inflow of money pushed it's foreign reserves to a record USD 1.3 trillion ending June.

The first half has seen a slowdown in the fixed assets investment growth from 29.8 per cent in the same period last year to 25.9 per cent this year.

"After nearly 30 years of economic reforms and opening up, China can use both domestic and overseas markets to absorb its production capacity to boost its economic growth," he said while rebuffing claims that China's economy is becoming overheated.