China 'becomes' world’s 2nd largest economy
Beijing: The dragon is on a roll. China’s economy expanded by 8.7% in 2009, likely, overtaking Japan to become the world's second largest economy behind only the US.
China's total 2009 gross domestic output was 33.5 trillion yuan ($4.9 trillion), while Japan’s GDP figures, to be announced next month, are likely to have contracted by around 6% in 2009.
Data released on Thursday said that Gross Domestic Product of China returned to double-digit growth in the fourth quarter of 2009 at 10.7 percent, and over the full year GDP surpassed the government's target of eight percent.
The eight percent target is seen as crucial to stave off social unrest in China's population of 1.3 billion people, but the country's biggest rise in inflation in 13 months underlined the broader challenges of breakneck growth.
“China has become the first, on the whole, to achieve recovery and stabilization in its economy,” said Ma Jiantang, commissioner of the National Bureau of Statistics, at a news conference. But he said China still faces "uncertainties" and a weak global outlook so the government will avoid major changes in economic policy.
The nation's Consumer Price Index, the main gauge of inflation, rose 1.9 percent year-on-year in December. China's authorities are already clamping down on bank lending and hiking borrowing costs to keep a lid on price pressures.
"The year 2009 was the most difficult time for China's economic development in the new century," Ma Jiantang said.
Just over a year after the global crisis erupted, Ma said a four-trillion-yuan (586-billion-dollar) stimulus package “held back the economic decline and achieved the recovery and rebound of the national economy”.
The 10.7 percent growth in the final quarter of 2009 was the best result since the second quarter of 2008.
It followed revised growth of 9.1 percent in the third quarter, 7.9 percent in the second quarter and a revised 6.2 percent in the first three months of last year.
The full-year figure exceeded analyst expectations, but was down from 9.0 percent in 2008 and was the slowest full-year increase in eight years.
China's urban fixed asset investment, a measure of government spending on infrastructure and a key driver of the economy, rose 30.5 percent in 2009 while overall fixed asset investment rose 30.1 percent, Thursday's data showed.
Industrial output from China's millions of factories and workshops, rose 18 percent in the fourth quarter, and 11 percent for all of 2009.
Retail sales jumped 15.5 percent in 2009. Ma put the figure at an increase of 16.9 percent, after inflation.