China's economy is expected to experience annual growth of 8.5 percent this year, said Qiu Xiaohua, deputy director of the National Bureau of Statistics.

　　Speaking at a briefing in Beijing yesterday, Qiu based his forecast on the 8.5 percent economic growth achieved in the first three quarters. Gross domestic product rose to 7.9 trillion yuan (US billion) during the period.

　　"In the remaining two-and-a-half months of 2003, the national economy will keep its rising strength with support from the investment and export sectors," he said.

　　In the third quarter, China's economy grew 9.1 percent, compared with 6.7 percent in the second quarter. This indicated the economy had left behind the negative impact of SARS.

　　"The growth of the service sector, particularly in the catering industry, has recovered to that (level) before the SARS epidemic," Qiu said.

　　The recovery of the service industry also helped increase the income of farmers, some of whom managed to return to cities for work after the end of the SARS outbreak.

　　Foreign trading, which was dealt a blow when SARS broke out, also recovered quickly and posted strong figures in the third quarter.

　　China is now the top export destination for South Korea and one of the three biggest overseas markets for Japan, Thailand and Singapore. In the first nine months, the nation also increased its exports to the European Union and Russia.

　　Fixed-asset investment, which accounted for about a third of China's economy, helped to create jobs and boost income and spending nationwide.

　　"This year, the investment sector is relying less on the government's budget as foreign investment and domestic loans grew much faster," Qiu noted.

　　With investment, trading and spending all surging, some economists doubted whether the statistics had underestimated the nation's economy.

　　Spending on housing, autos and exports, which combined to contribute to one-third of the economy, all surged more than 30 percent this year.

　　"With their contributions to the economy, the actual annual growth rate should be higher than the government's 8.5 percent forecast," said economist Wu Jinglian.

　　Qu Hongbin, an HSBC Plc economist, estimated a higher growth rate of 13 percent, based on the fast growth in each sector and their contribution to the economy.

　　Citing the economists' concern, the bureau official Qiu said that problems do exist, such as inefficient investment and lack of economic housing development for the common man.

　　"But those regional problems can't be regarded as proof of overall overheating," Qiu said. "As long as supply and demand is balanced, the economy will keep its healthy growth.

　　"Whenever China reports a rapid growth rate, some people start show concerns of an overheating economy. When the growth slows down, they begin doubting a recession is approaching," he said.