China said on Monday its gross domestic product grew 8.0 per cent in 2002 as booming exports, robust domestic consumption and a rush of investment helped the world's fastest growing major economy escape the global malaise.
"This year's economic growth was driven by three engines: investment, consumption and overseas demand," Zhu Zhixin, head of the State Statistical Bureau, told reporters.
China's GDP, the broadest gauge of economic activity, was expected to total 10.20 trillion yuan ($1.23 trillion). The preliminary figure given by the bureau at year's end almost never changes when the final data is released at the end of February.
In 2001, growth was 7.3 per cent, and Beijing had aimed for 7.0 per cent this year, seeing it as the minimum needed to create enough jobs to soak up millions of workers being laid off from bloated state-owned enterprises.
But the eight per cent pace has been expected in recent months as the economy built up steam this year, growing 7.6 per cent in the first quarter, 8.0 per cent in the second and 8.1 per cent in the third.
"The fourth quarter continued to maintain the stable pick-up of the first three quarters," Zhu said.
Exports a bright spot
Officials have said the country is aiming for seven per cent growth in 2003, a goal that should be well within reach.
"We expect economic growth to be around eight per cent in the first half of next year, or it could be slightly lower than eight per cent," said Song Guoqing, chief economist of the China Stock Exchange Executive Council.
Even amid the boom, China suffers from serious problems such as persistent deflation, a mountain of bad debt in the banking system and rampant official corruption.
Yet the headline figures of Asia's second-largest economy after Japan still impress.
Exports have defied earlier expectations of sluggishness to soar more than 21 per cent in the first 11 months from a year earlier as more foreign firms shift production to China.
Exports are seen cooling off by mid-2003, in part because this year's growth has created a higher base.
"We don't expect it to grow quite as strongly next year as it did this year, but there's not much tailing off yet," said Paul Cavey, an analyst with The Economist Intelligence Unit in Hong Kong. "It will probably be in the double digits for the year as a whole."
Domestic investment seen key
China's entry into the World Trade Organisation in December 2001 also spurred hopes the country would open its vast potential market wider to foreign products and services.
That optimism helped spur foreign businesses to pump nearly $50 billion in investment into the country so far this year.
Domestically, Beijing has stoked the economy's fires with big state spending programmes and 150 billion yuan of stimulus bonds to raise cash for public works projects.
"Private investment increased quite strongly in 2002, but really it's the government in the background holding everything up," Cavey said.
"All eyes will be on what happens to domestic investment growth. However well exports and consumption grow, it's really domestic investment that is propping things up," Cavey said.
"Foreign investment and exports are still going to be the bright spots for China, but to get sustainable growth you really need domestic investment," Cavey said.
Some analysts have speculated Beijing will scale back spending in 2003 in favour of other tools like a looser monetary policy that will boost credit.
"Fiscal policy will continue to be pro-active next year, but there might be some adjustments, while money supply will continue to be expanded," Song said.
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