China’s 2009 growth projected at 8.5 pct

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BEIJING: China’s economy likely grew 8.5 per cent in 2009 despite the global downturn, but the country still faces challenges this year, including the difficult task of driving demand, a senior official has said.

STRONGER GROWTH: A man walking on a snow covered bridge near newly-built apartment buildings in Beijing yesterday. China’s economy likely grew 8.5 per cent in 2009 despite the global downturn, but the country still faces challenges this year, including the difficult task of driving demand, a senior official has said. — AFP photo

STRONGER GROWTH: A man walking on a snow covered bridge near newly-built apartment buildings in Beijing yesterday. China’s economy likely grew 8.5 per cent in 2009 despite the global downturn, but the country still faces challenges this year, including the difficult task of driving demand, a senior official has said. — AFP photo

Growth is set to exceed the government’s eight-percent target as Beijing’s massive stimulus package “quickly turned around the slowdown momentum,” said Zhang Xiaoqiang, a vice chairman of China’s top economic planning agency.

The Chinese government has for years set the annual growth target at eight per cent — the rate seen as the minimum necessary to create enough jobs to prevent social unrest in the vast country of 1.3 billion.

Growth accelerated on the back of improving company profits, soaring investment, and booming domestic consumption, Zhang said in a speech posted Tuesday on the website of the National Development and Reform Commission.

But the Chinese economy however still faces many challenges to maintain a steady and fast expansion in 2010 due to constraints in boosting demand, overcapacity in some industries and fiercer international competition, he said.

“The trade environment outlook is no cause for optimism as foreign demand in the next year is unlikely to recover to the pre-crisis level given rife trade protectionism,” Zhang said.

“China will face rising international competition and friction in trade and (the acquisition of) energy and resources, capital and technology in the post-crisis times.

China’s “economic development will be more vulnerable to global economic and financial turmoil,” he said.

Zhang added that domestic demand growth would taper off as the effects of stimulus measures reached their limit.

China’s economy grew by 8.9 per cent in the third quarter of 2009 — the fastest pace in a year — after expanding by 7.9 per cent in the second quarter and 6.1 per cent in the first, the slowest pace in more than a decade.

Official full-year growth figures are normally released in late January. — AFP