Jia Kang, who heads the institute of fiscal science at the ministry, made the comment to Dow Jones Newswires on the sidelines of the annual session of the Chinese People’s Political Consultative Conference.

The Ministry of Finance is due to announce its 2010 budget plan Friday at the opening of the National People’s Congress, the annual legislative session.

Preliminary government figures showed last year’s budget gap was 2.2% of gross domestic product. That was up from around 0.4% in 2008, but lower than the 3.0% authorities had projected.

Source : Konaxis

This compared with a quarterly growth of 6.2 percent in the first quarter, 7.9 percent in the second quarter, and 9.1 percent in the third quarter.

Policies adopted by the Chinese government to fight the global financial crisis had produced significant results and the Chinese economic growth was on a consolidated recovery.

The figures showed that China has achieved the full-year growth target of 8 percent, which the government believes is essential to generating more jobs for its 1.3 billion population.

Source : Konaxis

“Based on the economic growth target of about 8 percent, set by the central government, we aim for industrial output growth at about 11 percent,” said Li Yizhong in a webcast on his ministry’s site.

Li’s comment was the first indication of Beijing’s 2010 growth target, a figure that usually is released after the start of the year. The annual target has been set at 8 percent for several years, though growth has exceeded that.

Forecasts by private sector economists for China’s economic growth next year range from 9 to 11.9 percent, well above the government target.

China’s economy expanded 7.7 percent for the first nine months this year.

A government report this month said full-year growth is forecast at 8.3 percent. The World Bank is forecasting 8.4 percent.

Li said the world’s economic recovery is still fragile and Chinese exports this year should be 17 percent below 2008 levels.

China’s industrial production in the first 11 months of this year rose 10.3 percent from the same period last year. Growth in November alone was 19.2 percent over a year earlier.

Source : Konaxis

In the first half, the GDP grew 7.1 percent from the same period a year ago to 13.99 trillion yuan ($2.06 trillion), still from the NBS report.

The GDP is seen as an indicator that the country?s stimulus policies are working and that the government will most likely achieve the 8 percent full year growth target it set early this year, analysts say.

Analysts say that while most other major economies are contracting and suffering from the worst economic crisis in decades, China appears to have turned a corner after a sharp drop in the GDP early this year, to 6.1 percent, down from nearly 13 percent in late 2007.

Growth in the second quarter was driven by strong auto and property sales, a rebound in manufacturing and huge infrastructure spending, which is propping up global commodity prices.

China’s overall retail sales increased by 15% in the first half of the year, to 5.87 trillion yuan (US$859.60 billion) from a year earlier, the National Bureau of Statistics (NBS) reported.

Retail sales in June also rose 15 percent from May, said the NBS spokesman Li Xiaochao.

Consumption contributed 53.4 percent to economic growth and 3.8percentage points to GDP growth in the first half of the year, Li said, which is a significant change with exports still suffering through a major slowdown.

However, the 21.4 percent fall in exports in June has eased, compared to May’s 26.4 percent. As a whole, foreign trade in June dropped to $182.57 billion, down 17.7 percent year-on-year, and had a surplus of $8.15 billion, the smallest in two years.

It certainly helped that H1 per capita urban and rural incomes rose 9.8 percent and 8.1 percent to 8,856 yuan and 2,733 yuan respectively.

Although some analysts remain skeptical about China?s statistics, a significant sign of recovery is that China’s industrial output expanded 10.7 percent in June from a year earlier, faster than the 8.9 percent rate in May, as shown in the NBS report.

?This is probably the only major economy in the world where manufacturing employment is rising,? said Mr. Rothman at CLSA, an independent brokerage and investment group.

A stronger economic growth is predicted by analysts for the second half of this year, at close to 9 percent from a year earlier. But there are risks emerging too, like the excessive bank lending as part of the stimulus package.

Source : Konaxis