China set to hit 8 percent growth goal in 2009

By Alan Wheatley and Zhou Xin

BEIJING (Reuters) - China is on course to hit its 8.0 percent growth target this year and become the first major economy to pull decisively out of the global slump, according to a Reuters poll.

The survey of 20 economists, conducted last week, suggests the momentum generated by massive fiscal and monetary stimulus will carry over into 2010 and lift the rate of gross domestic product growth to 8.8 percent.

The forecasts are 0.2 and 0.3 percentage points higher than the median results of the previous survey in March, reflecting Beijing's increasing determination to use all the policy levers at its disposal to make up for a collapse in exports.

"This recovery is sustainable until the end of next year at least," said Mingchun Sun, an economist with Nomura in Hong Kong who has long been confident that Beijing would achieve 8 percent growth -- the minimum deemed necessary to hold down unemployment.

Sun see the risks on the upside because investment is likely to be stronger than now expected, while consumption will benefit from government incentives and the wealth effects of rising property and stock markets.

Sun's bullish forecast of 10 percent growth for 2010 is eclipsed by that of Su Chang, an economist with CEB Monitor, a Beijing consultancy, who has pencilled in 10.2 percent for next year on the assumption of a rebound in exports.

"If the U.S. economy grows 3 percent, China's exports can jump 15 percent," Su said.

Even if the U.S. economy remains weak in 2010 and Chinese exports are flat, that would be much better than the 22 percent plunge so far this year in overseas shipments. As a result, China would still be able to achieve 9 percent growth, Su added.