China’s economy expanded 8.7% during 2009, exceeding the 8% full-year growth target set by its government.
The country’s GDP reached 33.54trn yuan ($4.91trn) for the year, putting it on track to overtake Japan as the world’s second largest economy after the US. Japan’s GDP figures are due out next month.
China’s growth accelerated over the course of the year, with the fourth quarter registering a 10.7% year-on-year rise on 2008, compared with quarterly growth of 6.2% in the first quarter, 7.9% in the second quarter, and 9.1% in the third quarter.
Ma Jiantang, director of the National Bureau of Statistics, attributed the recovery largely to the implementation of the government’s fiscal policy and moderately loose monetary policy, as well as the stimulus package adopted to cope with the global financial crisis.
"Last year was the most difficult one for China’s economy in the new century," said Ma.
"Thanks to the Government’s efforts to deal with various difficulties, the country’s economy ended the year accelerating and began to recover as a whole."
The GDP data follows news earlier this month that China overtook Germany as the world’s largest exporter. China exported $957bn of goods in the first 10 months of 2009, versus $917bn for Germany, according to data compiled by Global Trade Information Services.
However, William Fong, manager of the Dublin-domiciled Baring China Select Fund, said there could still be hiccups along the way.
“Although we expect China to continue to deliver high GDP numbers over the long term, GDP data may experience a bumpier ride over the next 2-3 years,” said Fong.
“Some growing pains are inevitable and it is important to remember if the Chinese government reins back bank lending substantially, they will do so as a part of a move to remove excess liquidity/credit in the market and to normalise the credit supply to ensure healthier economic development in the long run.
“Turning to the equity market outlook, 2009 saw the equity market make strong gains and the first leg of the rally is now behind us. 2010 is likely to be a year when good stock picking will be key. Our view is companies able to deliver superior earnings will be rewarded accordingly."
