Economy in China Regains Robust Pace of Growth

Economy in China Regains Robust Pace of Growth

SHANGHAI -- Fueled by an ambitious economic stimulus program and aggressive bank lending, China’s economy grew by 7.9 percent in the second quarter of this year, the government said Thursday, a surprisingly strong showing given the world economic crisis. The gross domestic product figures, released Thursday morning in Beijing by the National Statistics Bureau, are also surprising given how China’s exports have declined sharply after years of torrid growth. Late last year, Beijing had set a target growth of about 8 percent in 2009, though many analysts doubted it was possible, and the country seems to be accelerating on the pace, particularly in the past few months. That level of growth was seen by many analysts and policymakers as vital to helping maintain social stability in the country. The robust growth in China’s economy came as the United States and several other leading economies remain mired in recession, hobbled by the aftereffects of bad lending, weak real estate markets, and the uneven results of economic stimulus packages. In China, strong auto and housing sales, a soaring stock market and solid retail sales have helped renew confidence here. "It’s very encouraging, the 8 percent growth target is in sight," Daniel Soh, an economist at Forecast in Singapore, to Reuters. "It’s by now clear that the fiscal stimulus package has offset the contraction in export activity,” he said. Some analysts, however, have warned that China’s growth also holds serious risks because of an explosion of bank lending that could eventually led to non-performing loans, overly aggressive infrastructure spending that could be wasteful, and policies that do not favor private businesses. Still, the strong second-quarter showing, which makes China one of the few major economies in the world with spectacular growth, indicates that China is recovering well, after its gross domestic product rose 6.1 percent in the first quarter of the year.