China's economy maintained a robust 9.4 percent in the first nine months in 2005, as investment growth fell only slightly and exports continued to surge, the latest official figures show.

Gross domestic product (GDP) in the January-September period totaled 10.63 trillion yuan (1.3 trillion US dollars), spokesman Zheng Jingping for the National Bureau of Statistics (NBS) announced here Thursday at a press conference.

The stable, fast growth is close to the economists' expectations. In breakdown, the Chinese economy grew by 9.4 percent, 9.5 percent and 9.4 percent in the first, second and third quarters, respectively.

However, Zheng expressed concern that there are still problems in the "oversized and irrational structure in investment in fixed assets, noticeable foreign trade imbalance and much slowed increase in profits in some industrial sectors."

Total investment in fixed asset, an indication of how much the government is spending on major infrastructure projects, shot up 26.1 percent in the first nine months to 5.7 trillion yuan (702.8 billion dollars). The increase is only 1.6 percentage points lower than a year earlier.

In the past years, China took a slew of market-based or administrative measures to cool down excessive investment in such industries as steel, cement and real estate, in an effort to keep the economy running on a healthy track.

When investment growth topped 40 percent, the central government ordered energy-saving measures and told local officials to cut spending on pointless prestige projects and unneeded factories, roads and other facilities.

In the first three quarters this year, real estate investment rose 22.2 percent, 6.1 percentage points less from the same 2004 period. Fielding a question from the press, Zheng said the government "steadfastly" supports the healthy development of real estate sector.

"The key of our policy lies in preventing the (real estate) prices from surging too fast, instead of bringing down the prices abruptly, which is not in line with the law of economy or interests of the government and ordinary people, " Zheng said.

Figures also show the China's exports shot up 31.3 percent to 546.4 billion US dollars and imports rose 16 percent to 478.1 billion dollars resulting in a trade surplus of 68.3 billion dollars.

On Thursday, the NBS spokesman Zheng said China's currency exchange rate will remain stable for a period of time.

On July 21, China's central bank, announced a 2 percent appreciation of the yuan and a switch of the currency's US dollar pegging system to a basket of foreign currencies.

"The reform needs to be further observed. It is impossible to revalue the currency day-to-day," he said. Zheng reaffirmed the masterpiece of exchange rate reform is to improve its determination system, instead of a simple revaluation.

In a phone interview with Xinhua, Wang Zhao, a research fellow with the Development and Research Center of the State Council, said the "double surpluses" in trade and capital accounts is the "most worrisome" issue for the Chinese economy. He foresees China's trade surplus to hit as much as 90 billion US dollars for 2005.

Zheng also said the worsening political ties with Japan, China's third biggest trading partner, would affect economic relationship between the two neighbors.

"It is unrealistic to keep the economic relations warm amid cool political relations and without a sound outside environment," he said in response to a Japanese journalist's question.

Among other fears for the Chinese economy are declining profit margins posted by industrial enterprises and yawning gap between the urban and rural areas, economic officials and experts agree.

According to the NBS figures, total consumer spending, another engine for economic growth, rose 13 percent in the first three quarters, with the consumer price index -- the leading barometer of inflation -- rising a moderate 2 percent.

The lasting oil price hikes, Zheng said, will only have a "limited" impact on China's economy though 40 percent of oil consumed in the country is imported.

China's aggregate oil consumption is not high, accounting for 8 percent of the world's total, and China has a lot of supplanting energy sources, like coal and natural gas, he claimed.

Zheng predicts that the Chinese economy would grow at a pace of 9 percent or slightly higher in 2005. "A modest slowdown, if conducive to the long-term, stable development, is very good."

Source: Xinhua