China's economy grows 8.9 pct in third quarter: govt

BEIJING (AFP) - – China's economy grew 8.9 percent in the third quarter of 2009, the government said Thursday, in a sign the world'sthird-largest economy was still growing strong.

The Asian giant expanded at the fastest quarterly rate in a year after growing 7.9 percent in the second quarter and 6.1 percent in the first three months of the year, which was the slowest pace in more than a decade.

China's gross domestic product grew by 7.7 percent in the first nine months of 2009 compared with the same period a year ago, after growing by 7.1 percent in the firsthalf, the National Bureau of Statistics said.

Despite the pick-up in growth, the government warned of major challenges in resolving imbalances in the economy.

"At present, it is the crucial stage for the national economy to realise a stable growth, yet the basis of the economic recovery still needs to be consolidated," bureau spokesman Liu Xiaochao said.

"The insufficient external demand is still severe," he said, adding that "expanding domestic demand and (making) structural adjustments remain an arduous task".

Late Wednesday, ahead of the public release of the data, the government expressed confidence in the economic outlook -- just a few weeks after saying China's recovery from the global financial crisis was not yet stable.

"In the past three quarters... China's economic and social development situation has done better than forecast at the beginning of the year," the State Council, or cabinet, said in a statement on its website.

"The positive trend of recovery has been consolidated," said the statement, issued after a meeting headed by Premier Wen Jiabao.

Before the global crisis struck, the Chinese economy had experienced double digit growth from 2003 to 2007 and again in the first two quarters of 2008.

The turnaround has been underpinned by an unprecedented four-trillion-yuan (586-billion-dollar) stimulus package unveiled last November and massive bank lending in the first six months of 2009.

Beijing has said it is on track to meet its target of eight percent growth for 2009, a level seen as essential for job creation and social stability in the nation of 1.3 billion people.

China's urban fixed asset investment, a measure of government spending on infrastructure and a key driver of the recovery, rose 33.3 percent in the first nine months compared with a year earlier, the bureau said.

The nation's consumer price index, the main gauge of inflation, fell 1.1 percent in the first nine months compared with the same period a year earlier.

Industrial output, which shows activity in the nation's millions of factories and workshops, expanded by 8.7 percent in the January-September period, the bureau said.