China’s recovery is stronger than expected but Beijing will continue its looser lending policies to support growth, a top official said Monday.
“The economic development situation of the Chinese economy is better than expected,” Vice Premier Li Keqiang said in a speech at a business conference.
China’s third-quarter economic growth accelerated to 8.9 percent, up from the previous quarter’s 7.9 percent. The government says full-year growth should easily surpass its 8 percent official target.
Still, Li said, “We will continue the proactive fiscal policy and moderately relaxed monetary policy to maintain the continuity and stability of the macroeconomy.”
China’s economy has rebounded quickly from the global economic crisis, driven by the government’s 4 trillion yuan ($586 billion) stimulus and a surge in lending by the state-owned banking industry.
The biggest improvements have been in state-dominated industries such as construction, steel and cement, but private sector activity is rising. Consumer spending and other domestic consumption accounted for one-third of the latest quarter’s growth.
“Domestic demand has already become an important driving force for china’s economic recovery,” Li said.
Soaring bank lending has prompted concern about wasteful overinvestment by industry and concern that too much money is flowing into stock and real estate speculation. The government has imposed investment curbs in some areas and says it wants to promote new industries.