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China's economy hits annual target, but concerns linger

Updated: 2010-01-22 14:46
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China's economy resumed double-digit growth in the fourth quarter last year, pushing the annual figure beyond the government target of 8 percent.

But economists warned rising fears of inflation and the risk of market bubbles posed a challenge to a sustained recovery.

The gross domestic product grew 8.7 percent in 2009 after it quickened to 10.7 percent in the last quarter, the National Bureau of Statistics (NBS) announced Thursday.

"China has become the first to revive from the world economic downturn with a typical V-shape recovery," said Ma Jiantang, NBS director, at a press conference.

He attributed the growth to the government's timely stimulus package, as well as the proactive fiscal policy and moderately easy monetary policy.

The Shanghai stock market reacted to the figures with caution, adding 0.22 percent to close at 3,158.86 on Thursday.

To fight off the worst global recession in 80 years, China's government implemented the 4-trillion-yuan stimulus package with hefty spending on infrastructure expansion, such as roads and railways, to counter the 16-percent fall in exports as the downturn sapped demand for Chinese goods.

The nation's commercial lenders pumped out 9.59 trillion yuan ($1.4 trillion) in credit, almost double that of the previous year.

The promising economic climate saw the Shanghai stock market rise by 80 percent in 2009.

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"The double-digit growth followed a rebound of exports and robust industrial output growth in December. A low comparison base also contributed to it," said Zhuang Jian, an economist with the Asia Development Bank.

Value-added industrial output gained 11 percent in 2009 after shooting up 18.5 percent last month. Urban fixed-asset investment climbed 30.5 percent in 2009 over the previous year.

Retail sales rose 16.9 percent in 2009 after adjusting price changes. December saw an increase of 17.5 percent.

The brisk consumption was partly buoyed by 13 million auto sales last year, putting China ahead of the United States as the world's largest auto market on the back of government subsidies and tax incentives.

The NBS also revised the first quarter GDP growth from 6.1 percent to 6.2 percent. The third quarter data was raised from 8.9 percent to 9.1 percent.

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