China: 8.7% Economic Growth in 2009

China did not actually achieved double digit growth in 2009 but 8.7% is even more valuable than double digit GDP growth in the year of great recession. In fact, in the fourth quarter of 2009, the GDP growth was 10.7% compared to the same time one year ago. This is good news for not only Chinese economy but also for the whole world. It shows that the stimulus package that the government of China allocated brought some good result.

The high GDP growth means perhaps something extra for the country because there is a strong possibility that China has now the second largest economy in the world. Japanese figures will be announced after a few days and then the official confirmation will happen.

What is the magic solution that China could find in the time of economic recession? What Chinese decision makers did was to shift the focus to domestic consumption. Because of the recession, export suffered but because of domestic consumption the products were sold in home.

For the time being, things look very good. It will be good if China really becomes a consumer based country like USA. However, 2010 will bring new challenge for Chinese economy because the high growth has to b sustained.