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China's Economy Stays on Course to Grow 8 Percent in 2009

China's economy is on track to grow 8 percent in 2009, as new data suggest Beijing's massive stimulus spending continues to offset drops in exports.

China reports increases in industrial output, investment, loans and retail sales in August, even as exports dropped more than 20 percent. August data suggests the world's third largest economy is on a solid course for economic recovery.

Terence Khoo is a partner at Sofaer Capital in Hong Kong. He says Beijing most likely will reach its goal of 8 percent economic growth in 2009, thanks in part to government backed spending programs. "The balance sheets in China are in far better shape than in America because they basically tightened a lot earlier to prevent a crash," he said.

Last year, China introduced at $586 billion stimulus package to boost domestic spending. That helped offset a drop in exports to Europe and the United States, as global demand declined, Khoo says.

Between January and August, China's exports were down more than 22 percent, compared to the same period last year.

But, Khoo says, overall, China's economy has stabilized, and he expects the solid growth will continue. "I think it will get bigger. The American people are starting to consume. There's a bit more confidence," he said.

Khoo says China's trade has stabilized at a low level.

Khoo says both American and European companies are beginning to feel more confident and starting to place orders with Chinese factories, in anticipation of Christmas.