Chinese GDP up sharply

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BEIJING, July 16 (UPI) -- China Thursday announced its second-quarter GDP grew 7.9 percent from the same period of last year, thanks to huge fiscal pump-priming and record lending.

The National Bureau of Statistics said the measures helped spur the economy from its less robust 6.1 percent growth in the first quarter, blamed on declining exports.

The new number put the world's third-largest economy after the United States and Japan closer to achieving overall annual growth of 8 percent this year. China's GDP in the first half of this year totaled $2.06 trillion.

Bureau spokesman Li Xiaochao said positive economic factors were increasing, Xinhua reported. But he warned the recovery is still not on solid footing as many uncertainties remain.

In other developments, China's consumer price index, a main gauge of inflation, dipped 1.7 percent in June from a year earlier, the fifth straight month of decline. The producer price index, which measures inflation at the wholesale level, fell 7.8 percent year on year in June, the lowest in a decade.

China's retail sales rose 15 percent in the first half of this year to nearly $860 billion, the bureau said.

Li said consumer prices were falling, domestic demand remained inadequate and the economy was still plagued by overcapacity, Xinhua reported.

He said the government would closely watch for international price fluctuations to prevent inflation risks.

Last November, the government announced a $586 billion stimulus package that includes tax cuts and consumer subsidies.

China, the holder of the world's largest foreign exchange reserves, saw its total rise to $2.13 trillion at the end of June, up 17.84 percent from the same period of last year, the People's Bank of China, the country's central bank, announced Wednesday.