China's 2011 Growth Rate Pegged at 9.5%

China’s economy will grow 9.5 percent this year on continuing vigorous investments, said the IMF in its World Economic Outlook report. The assessment comes as a surprise to those who had forecast that China’s growth would slow as the government’s fiscal stimulus programs wind down.

The strong growth comes in the wake of even more robust 10.3% growth in 2010 even as developed nations — which provide nearly 75% of China’s export market — were suffering severe slowdowns due to falling consumer spending and rising joblessness. The nation’s 2012 growth rate was predicted to moderate further to 9.0 percent.

Investments by foreign nations eager to tap China’s booming consumer market and efficient manufacturing continue to grow though the rate of growth is decelerating, said the IMF. Due to booming consumer demand from its burgeoning middle class China continues to face inflationary pressures from rising property and food prices despite the government’s recent ending of credit stimulus.

The continued strong growth is apparent in the 13.1 percent surge in the net profits of China’s state-owned enterprises (SOEs) during the first eight months of the year. Revenues of SOEs jumped even faster at a rate of 24.2 percent on year.

The combined net profits of the 119 SOEs during that period totaled 624.2 billion yuan ($97.7 billion U.S. dollars). Their revenues jumped 24.2 percent year-on-year to 13.145 trillion yuan ($2.1 trillion).

China’s growth rate contrasts sharply with the scaled down rate of 4% projected for the world as a whole. The U.S. is expected to grow 1.5% this year and 1.8 percent in 2012, according to the IMF’s recent revision. In June its forecast had called for 2.5% and 2.7%, respectively.

The Euro zone’s growth outlook has also been lowered to 1.6% this year and 1.1% in 2012 from June’s forecast of 2% and 1.7%, respectively.