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China shows 8.9% GDP growth

China’s economic growth picked up as expected last quarter as a potent cocktail of breakneck investment and buoyant bank lending more than made up for a slump in exports, the government said on Thursday.

business Updated: Oct 22, 2009 21:44 IST

China’s economic growth picked up as expected last quarter as a potent cocktail of breakneck investment and buoyant bank lending more than made up for a slump in exports, the government said on Thursday.

Annual gross domestic product growth in the world’s third-largest economy accelerated to 8.9 per cent in the third quarter from 7.9 per cent in the April-June period and just 6.1 per cent in the first three months of the year in the depths of the global downturn.

“Good figures. Growth has picked up very swiftly,” said Wang Hu, an analyst at Guotai Junan Securities in Shanghai.

With GDP expanding 7.7 per cent in the first nine months, economists said the government will easily beat its target of 8 per cent average growth for all of 2009. “There’s no doubt that GDP will hit 8 per cent for the whole year,” Wang said.

Most economists expect stronger annual growth in 2010.

The yuan weakened against the dollar in both the spot and offshore non-deliverable forwards (NDFs) markets in the wake of the economic data.

"There are no surprises in the data, except maybe investment and industrial production on the upside, which shows the boom in China is due to stimulus," said Sebastien Barbe, senior economist at Calyon in Hong Kong.

To boost the nation’s economy, China had come up with a massive stimulus package worth about $585 billion.

According to the National Bureau of Statistics of China's spokesman Li Xiaochao, the investment in infrastructures was increased by a large margin.

"In the first three quarters, the investment in infrastructure (excluding electricity) went up by 52.6 per cent," Xiaochao said.