China's GDP growth for 2009 estimated at 8%
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TOKYO (MarketWatch) -- Chinese economic data released Friday reinforced the growing perception of an economy picking up steam, with retail sales and industrial production for the month of May coming in stronger than expected, while new bank lending continued at a torrid clip.
Friday's data capped a week of relatively robust news that dispelled some of the skepticism surrounding China's recovery, with the world's third-largest economy now on track to meet its growth targets this year, analysts said.
"Most likely industrial production growth will trend upward, supporting our 8% gross domestic product growth call for 2009," wrote Merrill Lynch economist Ting Lu in a research note Friday.
In March, Chinese Premier Wen Jiabao also said the country would expand its economy 8% this year, although it's not clear that a formal growth target has been set.
Industry reviving
Industrial output climbed 8.9% in May, the National Bureau of Statistics said Friday. The result was above expectations for a 7.8% rise, as reported by Dow Jones Newswires, but it matched exactly forecasts by the 21st Century Business Herald and Ming Pao newspapers, whose projections Merrill Lynch said appeared to be "whispered" leaks of the data. See full story on so-called 'whispered numbers.'
The more upbeat figures follow a fall of 26.4% in China's exports in May from a year earlier and an import decline of 25.2%, according to Statistics Bureau data released Thursday. Both figures marked their seventh-straight on-year decline. See story on Chinese trade.
"While improving this month, China's industrial production growth data has been in contrast with expansion in the Purchasing Managers Index," said J.P. Morgan's China equities chief, Jing Ulrich.
"China's May PMI of 53.1 represented a third-successive month of expansion in the manufacturing sector, suggesting that managers are cautiously optimistic in their outlook," he said.
The Statistics Bureau also reported Friday that retail sales were up 15.2% in May, compared to a 14.8% rise in April.
Bank lending up
Separately, data from the People's Bank of China reported that new yuan-denominated bank lending in China totaled 664.5 billion yuan ($97.2 billion) in May compared to 591.8 billion yuan in April.
Money supply, as measured by M2, climbed 25.74% at the end of May from a year earlier, roughly in line with a 25.9% rise anticipated by analysts as reported by Dow Jones Newswires.
"The stabilization in money supply is as expected, considering the record rate of growth at the beginning of the year," said Ulrich. "The rapid pace of credit creation in recent months has had a stirring impact on China's corporate sector, housing and stock markets."