• Mainland China's real GDP growth accelerated further to 8.9% in the third quarter from 7.9% in the second and 6.1% in the first as strong government-led investment and consumption more than offset the negative impact of export contraction.  In the first three quarters of the year, real GDP rose 7.7%.  

• With domestic demand remaining strong, mainland China's economy is estimated to grow by 8.3% in 2009, slightly above the government's 8% target.  

• Looking further ahead, the country is expected to maintain the same steady pace of growth, at around 8.5%, in 2010 given the gradual recovery of the global economy and the Mainland authorities' commitment to maintaining an accommodative policy stance.    

• In terms of monetary policy, the People's Bank of China is unlikely to raise interest rates until the second half of next year as consumer price inflation remains low.  While any signs of overheating in the housing and stock markets would put pressure on the authorities to tighten policy, they might first consider raising banks' required reserve ratio before adjusting interest rates.

Mainland China's real GDP growth accelerated further to 8.9% in the third quarter from 7.9% in the second and 6.1% in the first on the back of strong government-led investment and consumption.  In the first three quarters of the year, real GDP rose 7.7%, same as the growth in the second half of 2008.

Domestic demand remained the growth driver

In the third quarter, exports continued to plunge, falling 20.3% after tumbling 23.5% in the second as the global economy remained in recession.  But the slide of exports eased to 15.2% in September, suggesting that the worst of the global recession had probably passed.  Imports also fell by a much slower rate of 12.0% in the third quarter after plummeting 20.2% in the second, in part because soaring investment at home began to show up in imports.

With exports falling, domestic demand continued to play a central role in driving the Mainland's economic growth.  During the third quarter, the growth of retail sales jumped to 15.3% from 15.0% in the second, while that of fixed asset investment slowed slightly to 32.9% from 35.9%.  The growth of property investment was especially impressive, accelerating to 37.0% in September from 34.6% in August and contributing to a quarter of the overall fixed asset investment growth for the month.  

In the third quarter, government-led investment contributed about 9.5 percentage points to the overall real GDP growth, compared with 4.4 percentage points for household and government consumption.  Net exports of goods and services, in contrast, subtracted about 5.0 percentage points from the overall real GDP growth.

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