BRIDGING THE GULF: The 34.5-km-long Jiaozhouwan Gulf Bridge in Qingdao, Shandong Province, has taken shape and is expected to be completed by 2010 (LI ZIHENG)

EDITOR'S NOTE: When the Chinese Government announced the massive 4-trillion-yuan ($586 billion) stimulus package, it meant not only to spur economic increase, but also to modify economic growth patterns and upgrade the national economic structure, in an effort to ensure the healthier, faster and better growth of the economy. To date, those measures have taken effect as reflected in restored investor confidence and active investment and consumption. However, a higher growth rate is not enough.

Beijing Review publishes a series of articles in this issue to analyse the current problems and present an outlook on the economy.

Signs of recovery are everywhere. The idled machines have started running again and factories refresh their recruitment billboard. Dongguan, a small industrial city in south China's Guangdong Province, is regaining vigor and vitality after being hit hard by the global financial crisis. The city is one of the major industrial clusters for small and medium-sized enterprises, producing goods for exporting.

In Beijing, a substantial number of cars are being sold each day; in earthquake-hit Sichuan Province, large-scales of factories and buildings are being rebuilt; and in resource-rich Shanxi Province, trucks loaded with coal are queuing on highways, causing traffic jams that only appeared before the crisis. Likewise, wind power plants are sprouting up one by one in Gansu Province and Xinjiang Uygur Autonomous Region.

These indicators seem to declare an economic victory to the people that the negative impact on China brought about by the global financial meltdown is fading fast.

Earlier this year, the Chinese Government proposed an 8-percent GDP growth target, and the current economic recovery is making the target more attainable. Figures from the National Bureau of Statistics (NBS) showed that in the second quarter the Chinese GDP grew 7.9 percent year on year, from 6.1 percent in the first quarter.

On August 6, the State Information Center (SIC) released an estimate on the economic performance in the second half, expecting the GDP to grow 9 percent in the third quarter and 10 percent in the fourth quarter, year on year, which makes it possible to achieve 8-percent GDP growth for the whole year.

As early as July 16, HSBC upgraded this year's Chinese GDP growth from 7.8 percent to 8.1 percent, while Morgan Stanley expected 9-percent growth in 2009.

Upward trend

After the credit crunch spread around the globe, the Chinese Government immediately took a string of stimulative policies to spur economic growth. According to Li Xiaochao, spokesman of National Bureau of Statistics, thanks to the stimuli, the economic downturn started to lose ground to a revival. The second-quarter economic performance was a clear demonstration of a reversal in the downward trend. Chinese GDP grew 7.9 percent year on year in the second quarter, up 1.8 percentage points from the growth rate of the first quarter.

Li said the economic revival was shown in four areas.

First, GDP growth gained momentum. In the first half, the growth rate hit 7.1 percent year on year, with that of the second quarter far outpacing the rate in the first quarter.

Second, domestic demand continued to grow at an increasing rate. In the first half, retail sales of consumer goods soared 15 percent year on year, defying the damage caused by the financial crisis. The sales of homes and autos stole the show by growing 31.7 percent and 18.1 percent, respectively.