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China's GDP expands 8.7% in 2009

 

BEIJING, Jan. 21 (Xinhua) -- China's economy expanded 8.7 percent in 2009 from a year earlier, exceeding the government's annual growth target of 8 percent, according to the official data.

Gross domestic product (GDP) reached 33.54 trillion yuan (4.91 trillion U.S. dollars) in 2009, Ma Jiantang, director of the National Bureau of Statistics (NBS), told a press conference Thursday.

China's economy rose 10.7 percent year on year in the fourth quarter. This compared with 6.2 percent growth in the first quarter, 7.9 percent in the second, and 9.1 percent in the third.

Zhuang Jian, senior economist of the Asian Development Bank, said the fourth quarter growth rate was higher than previous market expectations, with most economists expecting an increase of 10 percent year on year.

"The accelerating GDP growth in the fourth quarter was due to a low basis of the same period in 2008, when the quarterly GDP expanded 6.8 percent from a year earlier, also indicating that the country's economy is on a strong rebound," Zhuang said.

Zhu Baoliang, chief economist of the State Information Center, told Xinhua: "The GDP growth last year was far better than expected, which is a solid foundation for sustainable economic development in 2010."

According to the NBS, in 2009, the value-added of the primary sector topped 3.55 trillion yuan, up 4.2 percent from a year earlier; that of the industrial sector stood at 15.7 trillion yuan, up 9.5 percent year on year; and the tertiary sector, services, reported value-added totaling 14.29 trillion yuan, up 8.9 percent.

"Last year was the most difficult for the economy in the new century," said Ma Jiantang. "Thanks to government efforts to deal with difficulties, the economy ended an accelerating slide and began to recover."

Ma attributed the recovery mainly to the implementation of the proactive fiscal policy and moderately loose monetary policy, as well as the government stimulus package to cope with the global financial crisis.

He described the country's economic development last year as a "harvest," saying the newly released figures confirmed a V-shaped recovery.

Since November 2008, the government has adopted a series of stimulus measures, including a 4-trillion yuan stimulus package, tax cuts, and consumer subsidies to shore up growth and employment.

An important component of the stimulus package was the revitalization scheme for 10 major industries, including steel, car making, textiles and machinery, to which the government devoted huge investment.

It also put forward preferential policies to encourage sales of home appliances, cars and motorbikes in rural areas. More government investment came to infrastructure, scientific research and public services.

Meanwhile, the government shifted from a tight monetary policy in 2008 to the moderately easy monetary policy in 2009 to help the national economy counter adverse impacts of the financial crisis.

Figures from the People's Bank of China, the central bank, showed new yuan-denominated lending last year hit a record 9.59 trillion yuan, almost double that of the previous year.

The value-added of industry rose 11 percent in 2009 from a year earlier. Retail sales rose 16.9 percent year on year, while fixed-asset investment rose 30.1 percent.

Ma gave no figures for the respective contributions of exports, consumption, and investment to the GDP growth, but promised to disclose the figures at the end of the month.

Yu Yongding, a research fellow with Chinese Academy of Social Sciences, said the government's stimulus package was a success in "risk control," but some measures did not serve a balanced economy. "The government should focus more on economic structure adjustment."

Zhang Liqun, a researcher with the Development Research Center of the State Council, echoed Yu, by saying heavy investment and strong consumption had driven the economic growth to accelerate last year.

"The economic development last year was powered mainly by the engine of government-stimulated investment," Zhang said. "The country needs to seek balanced development pattern to seek sustainable development."

According to the NBS, China's retail sales totaled 12.53 trillion yuan last year, up 15.5 percent from a year earlier. The growth rate was 16.9 percent when deducting inflation.

"Although consumption expanded fast last year, domestic demand was still not as large as expected," said Zhang.

At the Central Economic Work Conference held in December, the government vowed to focus on expanding domestic consumption, supporting agriculture, and improving people's living standards in 2010.

Asked whether the government would end the stimulus package or introduce more stimulus plans, Ma said, "A key point of macro-regulation this year would be to balance the tasks of ensuring stable and relatively fast economic growth, adjusting economic structure and regulating inflation prospects."

Ma expected stable and relatively fast development of China's economy in 2010, due to the facts that world economic environment would improve slowly, and domestic investment and consumption were expected to increase.

"More over, exports and imports in 2010 will shift from a decreasing momentum to contribute to the growth of the economy," Ma said.

The NBS figures showed China's foreign trade totaled 2.2 trillion U.S. dollars in 2009, down 13.9 percent from a year earlier. But it began to increase in November, when the figure rose 9.8 percent from a year earlier.

"Although China had achieved remarkable successes in economic development and combating the world economic downturn last year, there are still domestic challenges and uncertainties in world market," said Ma.

The country this year would roll out more measures to improve the economic pattern, while eliminating outdated production capacity, controlling inflation, and preventing real estate prices from rising too fast, he said.

 

 


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