Wen offered his damning assessment at the end of the 5-16 March National People’s Congress, the rubber-stamp parliament which the government tends to use as an occasion to laud its own achievements (especially regarding the economy). Until Wen’s outburst the meeting had run true to form: coverage was dominated by China’s new property law - a vaguely worded but symbolically important recognition of private ownership - and the unification of the tax system for foreign and domestic businesses.

But the premier’s concerns overshadowed these reforms. "China’s investment growth is too high, lending growth too fast, liquidity excessive, and trade and international payments very unbalanced. Energy efficiency and environmental protection issues haven’t been properly resolved," Wen added. The premier also admitted that corruption was rampant and that the government had failed to achieve its targets for improving rural healthcare.

Wen’s concerns tally with what AsiaInt has been saying for some time. However, it would be unwise to celebrate the premier’s words when his policies suggest something altogether different: as China’s chief economic planner Wen is ultimately responsible for numerous policies in evidence today which, far from trying to control growth, endeavour to drive ever-more-rapid expansion.

After the economy grew a "surprisingly fast" 10.7% in 2006, it is likely that Beijing will be equally taken aback when figures for the first quarter of 2007 are produced. Data for the first two months provide no evidence that the government has been trying to engineer a controlled slowdown so far this year.

Industrial production, for example, rose 18.5% year-on-year in January and February, versus a 16.6% growth in 2006. The supply of narrow money M1 increased 21% in February and lending is also accelerating: the volume of outstanding bank loans jumped 17.2% to US$3.04tr.

Fixed asset investment remained steady from the end of last year, growing 23.4% in the first two months of 2007, but an acceleration as the year progresses seems inevitable. Demand for investment will be fuelled by the surge in industrial production and there will be a ready supply of funds thanks to the loose money and prolific lending.

On 17 March the central bank raised interest rates for the third time in a year in a bid to rein in investment and quell inflationary pressures. However, the 27-point rise will have a minimal effect in slowing the considerable momentum that the economy has acquired.

The external economy is just as worrying. The US$23.8bn trade surplus registered in February was nearly 10 times the size of that registered in same month a year ago. Exports rose 51.7% to US$82.1bn while imports were up just 13.1% at US$58.3bn. For the trade surplus to fall below last year’s level (US$177.5bn), imports must increase by 25% this year while export growth drops to 20%.

There is no chance of Beijing letting this happening. However, it is not inconceivable that the US might finally decide it can no longer tolerate its trade deficit with the Chinese, which continues to widen: Washington reckons the imbalance grew 19% in January to US$21.3bn. With the yuan’s rise seemingly stuck, Beijing is neglecting its only means of addressing the situation: over the next couple of years Washington might decide that trade restrictions are the only alternative.

A US embargo could bring China’s economic growth to a sharp stop. So too would a burst in China’s real estate bubble or a stock market crash. The 27 February slump on the Shanghai Composite Index (SCI) wiped US$129bn from the market’s value in what was sharpest drop in a decade, but investors have not been deterred from returning to the fray.

The SCI is now back above 3,000 (the level it reached on 26 February) even though the fundamentals of its component companies in no way justify such strength. Beijing might want to cool off the market, but the SCI is (for now at least) a profitable home for the excess liquidity that the government itself encourages.

There is therefore ample evidence to dismiss Wen’s alarm-call as just another instance of Beijing saying one thing and doing quite another. However, it is worth noting that Wen would be unable to take aggressive steps to rein in the economy even if he wanted to.

Unstable, unbalanced, uncoordinated, and unsustainable as it might be, China’s growth is creating jobs at a time when there is severe pressure on the employment market. It took the fastest growth rate for more than a decade to create 11.8m new jobs and keep the unemployment rate at 4.1% in 2006. The ministry of labour and social security has warned that even a similar performance this year would not be enough to prevent the rate rising to 4.6%.

Creating jobs is the government’s top priority. Even a moderate increase in unemployment is likely to have a major impact on social stability, particularly in China’s big cities.

Voluntarily precipitating such an outcome is unthinkable to Beijing, especially in a year in which it is holding the five-year Party Congress. However, the government’s efforts to increase jobs mean that when the downturn does come, it will be all the more painful.