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Chinese Economic Growth Reaches Record High - 2003-10-17


China says its economy is blasting forward with a reported growth rate of more than nine percent. Many analysts believe the figures released Friday show the mainland's economy has fully recovered from Severe Acute Respiratory Syndrome, or SARS-related setbacks.

Government statistics show China's economy grew by 9.1 percent in the third quarter - topping figures from the same quarter last year.

Deputy director of the National Bureau of Statistics, Qiu Xiaohua, says the new year-on-year figures show China's economy has "recovered from the lagging effect of SARS and resumed its fast growth."

China's economy slowed in the second quarter of this year posting under seven percent growth after an outbreak of the sometimes deadly respiratory virus spread in the country. This sparked concerns that hurt tourism-related industries, including hotels and airlines. Before health authorities were able to halt the outbreak, 349 people died and more than 5,300 people were infected in mainland China.

But economists say China was able to regain its momentum due to strong foreign trade, retail sales and fixed-asset investments.

Li Kui-Wai is an economics professor at City University in Hong Kong who says the SARS health crisis was not a fair measure of China's economic performance.

"Well, suppose the SARS thing is very … temporary … affecting maybe only the second quarter," said Professor Li. "So, if you have a more robust figure in the third quarter, this is expected in the sense that the consumption, which has been removed in the second quarter, will now come back in the third quarter."

Professor Li notes basic economic indicators are very strong even if you strip away to boosting effects of large amounts of government spending. He says the key is to look at China's lack of inflation, the stable pool of low-wage labor and the busy construction industry.

Professor Li and many other economists, estimate growth statistics will hover between eight to 10 percent for the next two years in China.

On Thursday the World Bank said it expects China to be the top global performer with a 2003 growth rate of close to eight percent - in line with Chinese government estimates.

Despite the glowing numbers, Chinese leaders are trying to address underlying structural problems in their economy such as high unemployment as the country reforms its debt-ridden state-owned industries to allow for free market growth.

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