Chinese economy spurts
BEIJING — China’s economic growth accelerated in the second quarter amid a stimulus-fueled investment boom, boosting hopes the world’s third-largest economy is emerging from the global downturn.
The economy expanded by 7.9 percent in the period from a year ago, up from 6.1 percent growth in GDP the previous quarter, the National Bureau of Statistics said Thursday.
"The data showed the recovery is stronger than expected," said economist Zhu Jianfang of Citic Securities Ltd. "There will be no suspense about achieving the government’s goal of 8 percent GDP growth this year."
Many analysts expect China to be the first major country to emerge from the worst global slump since the 1930s. That could help pull the rest of the world out as China buys more raw materials, industrial components and consumer goods from struggling economies in the United States, Europe and elsewhere.
The International Monetary Fund earlier this month raised its forecast of China’s 2009 growth by 1 percentage point to 7.5 percent. The World Bank boosted its forecast last month from 6.5 percent to 7.2 percent.
Goldman Sachs said compared with the previous quarter — the way other major economies measure growth — China’s second-quarter growth accelerated to 16.5 percent on an annualized basis.
The government warned, however, that a full-fledged recovery is not firmly established no fax cash advance.
"The difficulties and challenges in the current economic development are still numerous," a statistics bureau spokesman, Li Xiaochao, said at a news conference. "The basis of the rebound of the people’s economy is not stable."
The faster growth came despite a plunge in China’s trade and foreign investment since late 2008, reflecting continued dependence on a $586 billion stimulus to keep the economy expanding.
The government is trying to cut reliance on exports by boosting domestic consumption with its plan to pump money into the economy through a scheme to build new public works.
Most of the money has gone to state-owned construction companies and suppliers of steel and concrete, but it is flowing into the private sector as those companies pay workers and buy materials.
Rock Jin, chief economist for Sinolink Securities in Beijing, said 2.5 percentage points of the 7.9 percent quarterly growth came from stimulus-financed investment and the rest from production. "If the investment-driven portion of GDP growth can be maintained around 2.5 percent, it will be no problem achieving the goal of 8 percent growth this year," Jin said.