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Beijing - China's economy grew faster than expected in the second quarter, easing fears of a hard landing and strengthening Beijing's resolve to fight persistently high inflation.
China's statistics office said on Wednesday that stabilizing prices remained the top priority, even though a "complex and volatile" global economy posed a threat to growth, complicating the policy choices.
Second-quarter gross domestic product rose 9.5% from a year earlier, exceeding economists' forecasts for 9.4% growth, helped by solid domestic consumption and investment.
But that was still the slowest pace since the third quarter of 2009, when the world economy was pulling out of its worst recession in 80 years.
Some cooling was expected because China has raised interest rates and clamped down on bank lending to try to ease inflation, which hit a three-year high in June. The stronger-than-expected GDP figures suggest Beijing may have more room to tighten without choking off growth.
"These are very good numbers," said Liu Li-Gang, an economist with ANZ in Hong Kong.
"This is perhaps the reason the (central bank) raised interest rates last week. They are showing they are not afraid of a significant slowdown in the economy."
For investors worried that Beijing's tightening campaign might exact too heavy a toll on the fastest-growing major economy in the world, the figures offered some reassurance. Industrial output in June was also stronger than expected, growing at its fastest pace in over a year.
Asian stocks, metals and the Australian dollar all rose.
China's GDP in April to June rose 2.2% from the first quarter on a seasonally adjusted basis, a slight pick-up in pace from 2.1% in the first quarter.
Chinese officials have struck a hawkish note in recent days, mindful of the risk that overheating inflation could stoke civil unrest.
Although many economists think overall inflation pressures will ease during the second half of the year, prices have soared for popular staples such as pork and it will take time for them to recede.
A small majority of analysts expect the central bank to raise interest rates again this year and most forecast further increases in bank reserve ratios, a Reuters poll last week showed.
Sheng Laiyun, a spokesperson for China's statistics bureau, said stabilizing inflation was the primary goal, and policies would be "targeted, flexible and effective," echoing recent remarks by Premier Wen Jiabao.
"It's not easy and China has done a great job to maintain fast economic growth when the global situation is complex and volatile," Sheng said.
Europe's sovereign debt troubles and a slowdown in the US economy means two of China's best export customers are struggling. New export orders slipped in June, a manufacturing survey showed earlier in July, which raised questions about China's growth prospects.
But Wednesday's figures suggested domestic demand remains robust. Final consumption contributed 4.6 percentage points to first-half growth, while exports subtracted slightly, China's statistics bureau said.
Analysts say China's economy is on course for growth well above 9% this year, a rate that would be the equivalent of adding Switzerland's GDP to the $6 trillion economy.
Still, demand weakness in China's Western export markets may cause economic growth to slacken in the third quarter from the second, they say.
China's statistics office said on Wednesday that stabilizing prices remained the top priority, even though a "complex and volatile" global economy posed a threat to growth, complicating the policy choices.
Second-quarter gross domestic product rose 9.5% from a year earlier, exceeding economists' forecasts for 9.4% growth, helped by solid domestic consumption and investment.
But that was still the slowest pace since the third quarter of 2009, when the world economy was pulling out of its worst recession in 80 years.
Some cooling was expected because China has raised interest rates and clamped down on bank lending to try to ease inflation, which hit a three-year high in June. The stronger-than-expected GDP figures suggest Beijing may have more room to tighten without choking off growth.
"These are very good numbers," said Liu Li-Gang, an economist with ANZ in Hong Kong.
"This is perhaps the reason the (central bank) raised interest rates last week. They are showing they are not afraid of a significant slowdown in the economy."
For investors worried that Beijing's tightening campaign might exact too heavy a toll on the fastest-growing major economy in the world, the figures offered some reassurance. Industrial output in June was also stronger than expected, growing at its fastest pace in over a year.
Asian stocks, metals and the Australian dollar all rose.
China's GDP in April to June rose 2.2% from the first quarter on a seasonally adjusted basis, a slight pick-up in pace from 2.1% in the first quarter.
Chinese officials have struck a hawkish note in recent days, mindful of the risk that overheating inflation could stoke civil unrest.
Although many economists think overall inflation pressures will ease during the second half of the year, prices have soared for popular staples such as pork and it will take time for them to recede.
A small majority of analysts expect the central bank to raise interest rates again this year and most forecast further increases in bank reserve ratios, a Reuters poll last week showed.
Sheng Laiyun, a spokesperson for China's statistics bureau, said stabilizing inflation was the primary goal, and policies would be "targeted, flexible and effective," echoing recent remarks by Premier Wen Jiabao.
"It's not easy and China has done a great job to maintain fast economic growth when the global situation is complex and volatile," Sheng said.
Europe's sovereign debt troubles and a slowdown in the US economy means two of China's best export customers are struggling. New export orders slipped in June, a manufacturing survey showed earlier in July, which raised questions about China's growth prospects.
But Wednesday's figures suggested domestic demand remains robust. Final consumption contributed 4.6 percentage points to first-half growth, while exports subtracted slightly, China's statistics bureau said.
Analysts say China's economy is on course for growth well above 9% this year, a rate that would be the equivalent of adding Switzerland's GDP to the $6 trillion economy.
Still, demand weakness in China's Western export markets may cause economic growth to slacken in the third quarter from the second, they say.
